Nasdaq has its worst day in 19 months as AI stocks sink after Democrats' midterm wins. What's known, and what isn't

Short answer: The Nasdaq Composite fell 5.52% on Nov. 5, 2026, its worst day since April 2025, and the S&P 500 lost 4.36%. Analysts tied the drop to Democrats' midterm wins and fears of limits on AI data centers. Others point to weak chip earnings. Nobody has proved one cause. Asian markets fell again Friday.

Key facts (as of 7:30 a.m. CT, Nov. 6, 2026) - Nov. 5 close: Dow down 1,833.06 points (3.44%), Nasdaq Composite down 5.52%, S&P 500 down 4.36%, per Fox Business. - It was each index's worst day since April 4, 2025, according to CNBC. - The Nasdaq closed in correction territory, at least 10% below its Oct. 6 record close (Fox Business). - Japan's Nikkei fell 5.96% on Friday, the third-largest point drop in its history (Kyodo News). - OpenAI published a community compact for its future data-center campuses on Nov. 5 (OpenAI).

Two days after Democrats won control of Congress, one of Wall Street's sharpest sell-offs in 19 months hit the stocks most tied to artificial intelligence. Our midterm results and governors stories cover the elections. This one covers what the market did, the explanations on offer and what is still unproven.

What happened to stocks on Nov. 5?

Stocks gave back Wednesday's post-election rally and then some. The Dow fell 1,833.06 points, or 3.44%. The Nasdaq Composite fell 5.52% and the S&P 500 fell 4.36%, Fox Business reported. CNBC noted that the three indexes all had their worst day since April 4, 2025, the tariff shock.

Chip stocks took the hardest hit. Nvidia fell about 9.3% and the Philadelphia Semiconductor Index fell more than 12%, per Fox Business. NBC News put the Nasdaq 100's drop at 6.3% and said the S&P 500 lost $2.8 trillion in value.

Wednesday had gone the other way. The New York Post reported the Dow jumped more than 1,500 points, and the Guardian said President Trump posted on Truth Social that day that stocks had hit another record high.

Why did the market fall?

The explanations differ, and none is established.

• The midterm and data-center theory. Fox Business quoted eToro analyst Jakub Rochlitz saying investors read the results as making the AI buildout "slower and more expensive." Analyst Dan Ives wrote that Democratic control creates "major hurdles for AI and tech legislation," as quoted by the Guardian.
• The earnings theory. NBC News said the sell-off was "triggered by two lackluster earnings reports" from Qualcomm and Arm Holdings on Wednesday night. Arm fell 13% and Qualcomm 9.5%, per NBC.
• The bubble theory. NBC also quoted Ed Yardeni of Yardeni Research: "I don't think this is an AI bubble bursting. I think it's an AI bubble losing some air very, very rapidly."

All three can be true at once, and a one-day move can't separate them. Treat any single cause as an analyst's reading, not a finding.

What have Democrats said about data centers?

Several Democrats called for limits. Sen. Bernie Sanders, I-Vt., posted "National data center moratorium now," and Rep. Yassamin Ansari, D-Ariz., said pausing AI development should be a day-one priority for the House majority, according to CNBC. CNBC also quoted Texas Gov.-elect Gina Hinojosa's late-October pledge of "a moratorium, a ban, on all data center approvals until laws can be passed."

In the CNBC Voter Poll, 56% of voters said AI and data centers were a crucial or major factor, and 65% of those voters backed a Democrat for Congress. Those are poll results, not a count of votes.

Not every Democrat has taken that line. Meta President Dina Powell McCormick said a winning governor had offered to meet after the inauguration because "we don't want to lose this investment," as reported by the New York Post. No federal limits are reported as enacted in the coverage we read. The new Congress doesn't convene until Jan. 3, 2027.

How has the industry responded?

OpenAI published its National Community Compact on Nov. 5. For each future campus it owns and operates, OpenAI says it will pay the full cost of the electricity and infrastructure it uses, publish site-level water and electricity use, and not use non-disclosure agreements with public officials, with narrow exceptions for security and trade secrets. It also published a policy blueprint asking lawmakers to set similar rules. The company says the compact builds on commitments it began in January. These are company pledges, not binding rules.

What did Trump say?

Trump blamed Democrats. "The Stock Market suffered one of the Worst Days in History based on the results of the Election," he wrote on Truth Social, as quoted by NBC News and the New York Post. Measured against the record, the day was the steepest since April 2025 but smaller than that day, when the S&P 500 fell 5.97%, per CNBC. NBC added that the Nasdaq Composite is still up more than 30% since Election Day 2024.

What happened in Asia on Friday?

The sell-off spread. Japan's Nikkei 225 closed down 3,643.13 points, or 5.96%, at 57,434.77, Kyodo News reported. South Korea's Kospi plunged 8% at the open and triggered a temporary trading halt, and Taiwan's TAIEX ended down 4.5%, NBC News reported. We had not checked Friday's U.S. session when we wrote this.

Where do the numbers disagree?

Small differences are worth knowing before you quote them.

• Index moves. Outlets round differently: 5.5% versus 5.52% for the Nasdaq, 4.4% versus 4.36% for the S&P 500. A photo caption in the Fox Business piece says the Nasdaq fell 5.2%, while its text says 5.52%. We use the text.
• Intraday versus close. The New York Post's story, written while trading was open, cites a Dow drop of 1,097 points and a Nasdaq drop of 5.1%. Its later article on Trump's posts uses the closing figures. We use closing figures.
• Value lost. The Post says S&P 500 and Nasdaq companies shed a combined $5.4 trillion, a single-day record. NBC says the Nasdaq 100 lost $2.3 trillion and the S&P 500 $2.8 trillion. The Guardian says nearly $2 trillion left the Nasdaq. These measure different things, and we haven't checked any against exchange data.
• Texas share. CNBC cites Wells Fargo for Texas holding 27% of planned data-center capacity. The Post says roughly 26%.

How are outlets covering it?

All four outlets agree on the size of the drop and that AI stocks led it. The Guardian and NBC News lead with the midterm results and the global spread, and NBC adds the earnings trigger. Fox Business leads with market data and analyst comment and stays closest to the numbers. The New York Post centers the data-center backlash and what it means for AI companies and Texas.

This story reports market moves and public statements. It is not investment advice.

Sources

• OpenAI, "Setting a new standard for responsible AI infrastructure," Nov. 5, 2026
• Kyodo News Digest, Nov. 6, 2026
• Fox Business, "Nasdaq tumbles 5%, Dow plunges more than 1,800 points"
• New York Post, "Nasdaq plunges into correction territory as Dem wins threaten data centers"
• New York Post, "Trump pins US stock market plunge on Democrats"
• The Guardian, "Nasdaq sees worst day in 19 months"
• NBC News, "Stocks plunge as AI worries crush tech shares"
• CNBC, "Magnificent 7 loses $1 trillion"
• CNBC, "Top Democrats call to rein in AI buildout"

Drafted with AI assistance from primary sources. Written and edited by The Whole Read newsroom under Monsaur Othman's editorial standards. Read how we use AI, our editorial policy and our corrections policy.