Stock Market Crash: Why Tech Stocks Lost $2.3 Trillion in a Day After the Midterms

Updated November 6, 2026. This is a live story: Asian markets are still trading and US futures are moving, so some figures below are intraday and may change.

The stock market crash of November 5, 2026 was the worst day for tech stocks in years. The Nasdaq 100 fell more than 6% and, according to Bloomberg, lost about $2.3 trillion in market value, the largest one-day loss on record for the index. Chip stocks had their worst day since March 2020. The trigger was not a bad earnings report or a rate shock. It was an election.

Two days after Democrats won the 2026 midterms by a wider margin than markets expected, investors decided the AI data center boom could get slower, costlier and more regulated. They sold everything tied to it: Nvidia, memory makers, chip designers, the companies that build and power data centers. By Friday morning the selloff had spread to Asia, where South Korea halted trading and Taiwan's index had its largest point drop on record.

Here is what happened, why tech stocks are down, and what is still unknown.

Tech stock crash: the short version

• The size: The Nasdaq 100 fell about 6.3% to 6.4% on Thursday, November 5. The Nasdaq Composite fell 5.5% and entered a correction, meaning it closed more than 10% below its recent high. The S&P 500 fell 4.4% and the Dow fell 1,833 points, or 3.4%.
• The worst hit: The Philadelphia Semiconductor Index fell 12.3%, its worst day since March 2020. SanDisk fell 22%, and Micron, AMD and Western Digital each fell 17%.
• Nvidia: Nvidia fell about 9.2% and lost more than $440 billion in value, according to CNBC. The stock is now down for 2026.
• The Magnificent Seven: Together, the seven biggest US tech companies lost more than $1 trillion in one session.
• The cause: Investors fear the Democratic "blue wave" will slow AI data center construction. Voters went against data centers in 40 of 41 local ballot measures, and several winning candidates promised moratoriums.
• Asia on Friday: South Korea's Kospi fell as much as 8.8%, triggering a 20-minute trading halt. Taiwan's TAIEX briefly fell 3,737 points, its largest intraday point drop on record. Japan's Nikkei entered a bear market, per CNBC.
• Futures: Early Friday, Nasdaq-100 futures were up about 1%, according to CNBC, but the rebound had not been tested in regular trading.

Why are tech stocks down? What caused the crash

There was no single piece of bad news. Three things landed in the same 48 hours, and they all pointed at the same industry.

1. The midterms produced a bigger blue wave than expected

The midterm elections were held on Tuesday, November 3. Markets had priced in Democratic gains, but not at the scale that arrived. NBC News reported that hundreds of candidates who pledged to restrict AI data centers won office, from Maine to Alaska.

The races that mattered most to investors were in the states where data centers are actually being built:

• Texas: Democrat Gina Hinojosa unseated Governor Greg Abbott, blaming him for the rapid data center buildout, according to CNBC. Texas is the largest data center market in the country.
• Ohio: Democrat Sherrod Brown ousted Senator Jon Husted, whom he called "the face of data centers." Democrat Amy Acton beat Vivek Ramaswamy for governor. Acton supports a "conditional moratorium" on data centers.
• Georgia, Michigan and Ohio are all major data center markets, and NBC News named them as states of particular concern to investors.

Semafor reported that tech-critical candidates swept to power in Texas, Georgia and Ohio, which together account for about 40% of planned US data center capacity.

We covered the election results in detail in AI Data Centers and the 2026 Midterms. The short version: on Wednesday, stocks rallied, then reversed. Thursday is when the market fully priced it in.

2. Voters rejected data centers almost everywhere

Data centers were also on the ballot directly. According to Ballotpedia figures cited by CNBC, there were 41 local data center measures in 10 states, 21 of them in Ohio. Voters sided against data centers in every one except Harwood, North Dakota.

A CNBC voter poll found that 56% of voters called data centers a crucial or major factor in their vote. That is unusual for an issue that barely registered in national politics two years ago. Elon Musk, the cycle's largest individual donor, spent at least $474 million and lost both of Texas's marquee races, CNBC reported.

The message for investors was simple. The AI boom depends on building enormous amounts of new computing capacity, and voters in the places where it gets built just said no.

3. Chip earnings gave sellers a reason to start

The selling began with chips. NBC News reported that earnings from Qualcomm and Arm, released Wednesday night, were seen as mixed and set off the chip selloff. Arm then fell 13% and Qualcomm 9.5% on Thursday.

From there it spread. Memory makers were hit hardest because their recent boom is almost entirely driven by AI servers. A memory-focused "DRAM" ETF fell almost 18%, according to NBC News.

Why it turned into a panic

An analyst quoted by The Wall Street Journal, via Semafor, called it "a true panic" and said the selloff was "100% about the chip stocks and the potential slowdown in the AI trade."

In Asia, Charu Chanana, chief investment strategist at Saxo, told SBS News: "There is definitely a panic element to the selling, and positioning is making the correction much more violent." Analysts cited by SBS pointed to leverage and forced liquidation. In plain English: many investors had borrowed money to buy AI stocks, and when prices fell fast, their lenders forced them to sell, which pushed prices down further.

Which stocks fell the most

The damage was broad. CNBC reported that all 11 S&P 500 sectors fell, and the tech sector dropped 7.3%, its worst day since March 16, 2020. On the New York Stock Exchange, decliners outnumbered gainers almost 6 to 1.

But the worst losses were concentrated in the AI supply chain: memory, storage and chips.

A few other details from the day:

• Nvidia turned negative for the year. CNBC put its year-to-date decline at 2.6% after the drop.
• CoreWeave, which rents out AI computing power, fell 10%, according to CNBC.
• Tesla fell 10.8%, per CNBC. NBC News reported that Tesla and SpaceX together have lost over $400 billion in value since the election.
• Alphabet, Meta, Amazon and Microsoft fell, but by less than the broader market, NBC News reported.
• Volatility: The VIX, often called Wall Street's "fear gauge," rose 11.57 points, its biggest point gain since April 4, 2025.

The numbers that made it historic

How does it compare to past crashes? CNBC's tally puts it in rare company:

• The Nasdaq Composite, S&P 500 and Dow all had their worst days since April 4, 2025, when tariff news sent the Nasdaq down 5.82% and the S&P 500 down 5.97%.
• The tech sector and the Philadelphia Semiconductor Index had their worst days since March 2020, at the start of the Covid crash.
• The Nasdaq 100's roughly $2.3 trillion loss is the largest in dollar terms on record, according to Bloomberg. That is partly because the index is much bigger than it used to be, so dollar losses are larger even when the percentage drop is smaller than in 2020.

It also helps to keep perspective. NBC News noted the Nasdaq Composite was still up more than 30% since Election Day 2024. Taiwan's stock exchange took the rare step of issuing a statement saying its market remained among the top performers globally this year.

Asia follows: Kospi halt, Taiwan's record drop, Nikkei bear market

When Asian markets opened on Friday, November 6, they took the hit. Most of the figures below are intraday, and closing numbers may differ.

• South Korea: The Kospi fell as much as 8.8% and briefly dropped below 5,000, triggering a circuit breaker that halted trading for 20 minutes, according to CNBC and SBS News. SK Hynix fell over 8% and Samsung about 7% early in the day, per CNBC. SBS later reported the Kospi trading 5.1% lower.
• Taiwan: Right after the open, the TAIEX fell 3,737.67 points, or 9.0%, the largest intraday point drop on record, according to SBS News. TSMC, which makes up more than 40% of the index, briefly hit its 10% daily limit. The index then recovered to about 3.8% lower. Taiwan had already fallen 3.2% on Thursday, before the US crash.
• Japan: CNBC reported the Nikkei 225 fell into a bear market, more than 20% below its June peak. SoftBank Group fell as much as 15.8% after the open and Kioxia as much as 15.3%, SBS reported.
• China and Hong Kong fell far less, with the Hang Seng and Shanghai Composite each down about 1.3%, according to SBS.

The pattern makes sense. South Korea, Taiwan and Japan are home to the world's biggest makers of AI chips, memory and chipmaking equipment. China's markets are less tied to the US AI buildout.

Is the AI bubble bursting?

That is the question everyone is searching, and the honest answer is that nobody knows yet. One day, even a historic one, does not make a burst bubble.

Here is what the people quoted in coverage said:

• Ed Yardeni, president of Yardeni Research, told NBC News: "I don't think this is an AI bubble bursting." He called the day "the cold shower that I anticipated might occur after a blue-wave situation."
• JPMorgan analysts, in a note cited by Semafor, wrote that they "expect that the AI boom will remain on track" but that it "may become costlier, slower, and more consolidated in the coming years."
• Victoria Greene, CIO of G Squared Private Wealth, told CNBC the AI trade is not dead.

The distinction matters. A bubble bursting means investors decide AI itself will not pay off. What happened on Thursday is closer to a repricing: investors still expect AI demand, but they now expect it to be met more slowly, with higher costs for power and permits and more political fights. That hurts the companies that were priced for the fastest possible buildout, which is exactly who fell hardest.

NBC News also pointed to a longer-running worry under the surface: doubt about whether AI will deliver productivity gains big enough to justify what is being spent on it. The election did not create that doubt. It gave it a date.

How the AI industry is responding

The companies building data centers moved quickly to address the backlash.

On Thursday, the same day as the crash, OpenAI released a set of commitments for data center campuses it owns and operates, according to Yahoo News. It said those campuses would pay for the electricity they use and the infrastructure needed to supply it, publish construction plans, disclose power and water use, commission independent noise studies, and stop using most nondisclosure agreements with public officials. Chris Lehane, OpenAI's chief global affairs officer, described it as "laying out the best lessons that we have learned."

Those pledges apply only to campuses OpenAI owns and operates. Capacity hosted by partners may fall outside them.

The Wall Street Journal also reported that OpenAI leaders discussed whether the election results meant the company would have to reset its 2027 capacity expectations. That report was based on a person familiar with the discussions. OpenAI has not announced any change to its plans, so treat it as unconfirmed.

What's still unknown

• Whether the rebound holds. Nasdaq-100 futures were up about 1% early Friday, per CNBC, but Asia was still falling at the same time. One overnight bounce says little.
• What Congress actually does. Democrats have talked about curbs on data centers, but new rules take time to write and pass. NBC News reported Democrats were still hoping to win Senate seats in Mississippi and Alaska.
• What happens to projects already underway. None of the coverage says existing projects will stop. New permits and new sites are the bigger open question.
• The economy. The October jobs report was due Friday morning, and CNBC reported traders saw roughly a 70% chance of a Federal Reserve rate hike at the December 9 meeting. A weak jobs number or a rate hike could add pressure.

What it means for you

This post explains the news. It is not financial advice, and we are not able to tell you whether to buy or sell anything.

• If you own index funds or a retirement account, you likely felt this, because the biggest tech companies are a large share of most US stock indexes. Large one-day swings make headlines, but they say little about where markets will be in a year.
• Watch for scams. Crashes bring a wave of "buy the dip" pitches, fake trading bots and accounts promising to recover losses. Anyone guaranteeing returns or urgently asking you to move money is a red flag.
• If you use AI tools, nothing changes overnight. The services you use run on data centers that already exist. A slower buildout could, over time, mean tighter capacity and higher prices for the most demanding AI models.

Stock market crash November 2026 FAQ

Why did the stock market crash on November 5, 2026?

Investors sold AI and chip stocks after Democrats won the 2026 midterms by a wider margin than expected. Many winning candidates promised to slow or halt data center construction, and voters went against data centers in 40 of 41 local ballot measures. Mixed earnings from Qualcomm and Arm the night before helped start the selling, which leverage and forced liquidation then made much worse.

How much did the Nasdaq fall?

The Nasdaq 100 fell about 6.3% to 6.4% on November 5, erasing roughly $2.3 trillion in market value, the largest dollar loss on record for the index according to Bloomberg. The broader Nasdaq Composite fell 5.5% and entered correction territory. The S&P 500 fell 4.4% and the Dow fell 1,833 points. All three had their worst days since April 2025.

Why are tech stocks down today?

Tech stocks are down because investors now expect the AI data center boom to slow. The companies that fell hardest, such as memory makers, chip designers and AI cloud providers, depend on rapid data center construction. After the midterms, that construction looks likely to face more local opposition, higher power costs and new regulation, so investors marked those companies down.

How much did Nvidia stock fall?

Nvidia fell about 9.2% on November 5 and lost more than $440 billion in market value, according to CNBC. It was the stock's largest one-day drop since April 2025 and the biggest drag on the Dow, NBC News reported. The drop turned Nvidia negative for 2026, with CNBC putting its year-to-date decline at 2.6%.

Is the AI bubble bursting?

It is too early to say. Ed Yardeni of Yardeni Research told NBC News he does not think this is the AI bubble bursting. JPMorgan analysts expect the AI boom to stay on track but become costlier and slower. The selloff looks more like investors repricing how fast AI infrastructure gets built than a verdict that AI demand has gone away.

Is this a stock market crash or a correction?

A correction means a fall of 10% or more from a recent high. The Nasdaq Composite crossed that line on November 5, so it is officially in a correction. Japan's Nikkei went further: CNBC reported it entered a bear market, meaning a fall of 20% or more from its June peak. "Crash" is not a formal term, but a record dollar loss in one day is why many outlets used it.

What happened to Asian markets after the US selloff?

On Friday, November 6, South Korea's Kospi fell as much as 8.8%, triggering a 20-minute trading halt. Taiwan's TAIEX briefly fell 3,737 points, its largest intraday point drop on record, before recovering part of the loss. CNBC reported Japan's Nikkei entered a bear market. China and Hong Kong fell much less, about 1.3%.

Will stocks recover?

Nobody can know that in advance. Nasdaq-100 futures were up about 1% early on Friday, according to CNBC, but one overnight bounce does not set a direction. Investors are watching the October jobs report, the Federal Reserve's December 9 meeting and what the new Congress does about data centers.

Want a frank breakdown of what the selloff means for a stock, a company or the AI industry? Ask uncensored AI on Cleus.

Sources

• Bloomberg: Semiconductor ETF drops as chip selloff extends into second day
• Bloomberg: AI selloff drives Asian stock markets to fresh grim milestones
• CNBC: Magnificent 7 loses $1 trillion. The most eye-popping stats from Thursday's tech stock plunge
• CNBC: Stock market today, live updates
• CNBC: Voters rebuff data centers in every ballot measure except one during the 2026 midterms
• NBC News: Stocks plunge as election outcome and AI worries crush tech shares
• Semafor: US tech selloff erases post-midterm gains
• SBS News: TSMC plunges to daily limit amid AI shock, Asian stock markets plummet
• BigGo Finance: Taiwan stocks plunge 1,374 points; Taiwan Stock Exchange issues rare statement
• Yahoo News: AI data centers are becoming a political liability. OpenAI has a new plan to win communities over