The Nasdaq fell more than 5% to around 24,416 points on Thursday, as US midterm results rattled AI-related stocks including Nvidia, Oracle and SpaceX. The technology-heavy index tracks 100 of the largest non-financial companies, and losses spread well beyond its largest technology constituents.

Democrats seized control of both the House of Representatives and Senate in the midterm elections, placing a major check on President Trump's power. Several Democrats campaigned on concerns about AI and data centres, and the result triggered a rotation out of technology stocks. For investors, the election changed the policy arithmetic around AI infrastructure.

• Nvidia fell 8%, while Broadcom dropped 9%, making the chipmakers leading contributors to the index decline.
• Tesla and SpaceX each fell 10%.

The weakness crossed several parts of the technology complex. Chip suppliers, Musk's Tesla and SpaceX, and Oracle were all hit, leaving investors to assess the election across supply, infrastructure and politically exposed businesses at once.

Elon Musk spent around $474m in the midterms, making him the largest single-cycle political donor in modern American history. His political spending gave investors a direct reason to connect the election result with two companies that each lost 10%. For Tesla and SpaceX, the political exposure became part of the same valuation debate as their operating performance.

Neil Wilson, UK investor strategist at Saxo Markets, said: “The blood is in the streets, folks. The fear is a total momentum unwind as Democrats pace the frontier and kybosh data centre buildout.” Wilson added: “This looks totally overdone but the nature of sell-everything of this market means we need to look for some stability first.”

Wilson's distinction between an overdone move and a need for stability pointed to a market still untangling momentum after two chambers changed hands. For allocators, that makes the path of congressional action only one part of the near-term pricing question; trading stability may matter first.

What does the congressional result change for investors?

MRB Partners said in a Thursday note: “A shakeout among the most speculative parts of the theme is underway. The US mid-term election results will add to headwinds for big tech and the data center buildout.” The assessment places election policy at the centre of the risk facing both large technology companies and the infrastructure behind them.

The result leaves investors with two linked questions. The first is how Democratic control might change the political treatment of AI and data-centre expansion; the second is whether a broad momentum unwind has temporarily overwhelmed company-specific considerations. The political question carries unusual weight because Musk spent $474m in the campaign, and his companies ranked among the sharpest casualties.

The session's breadth reinforced the concern. The Dow Jones tumbled 2.4%, while the broad-based S&P fell 3.5%. The Nasdaq's decline was more than twice the Dow's fall, placing the technology weighting at the centre of the session.

Financial shares initially rallied in early trading but quickly joined the broader sell-off later in the session. JPMorgan fell 4%, while Goldman Sachs lost 3.7%. The reversal showed that the pressure was no longer confined to technology after an early lift in financial stocks.

How did the selling reach London?

In London, the FTSE 100 fell 0.4% in the afternoon as the global selling wave reached the UK market. Polar Capital, which holds a major AI equity portfolio, and technology infrastructure builder Computacenter each fell 7%. Both ranked among the index's top fallers.

Portfolio managers must distinguish a political repricing from a lasting reduction in support for AI infrastructure spending. Thursday pointed to a broad, momentum-driven reset: congressional control changed perceived policy risk, while losses reached chipmakers, Musk's companies, banks and London technology names. Stability, rather than an immediate policy verdict, may set the near-term tone.