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TL;DR
The Nasdaq Composite fell 5.52% on Nov. 5, its biggest one-day decline in 19 months, while the Nasdaq-100 dropped 6.36%. The selloff followed US midterm results that raised investor concerns about oversight, permits, power costs and tax incentives for AI data centers; sweeping policy changes have not been enacted, and the effect of the election remains uncertain.
The Nasdaq Composite fell 5.52% on Thursday, Nov. 5, its steepest one-day decline in 19 months, as investors weighed whether US midterm results could bring tighter scrutiny and higher costs for AI data center projects. The Nasdaq-100 fell 6.36%, and Reuters put the loss in market value for that index at about $2.5 trillion; that figure does not cover every company listed on Nasdaq.
Nasdaq’s published closing data put the Composite at 24,315.00, down 1,421.51 points. The Nasdaq-100 closed at 26,629.81, down 1,807.36 points. Both indexes had their largest daily falls since the tariff-related selloff of April 2025, according to the source report’s comparison of exchange data. The Composite was 11.9% below its Oct. 6 record, putting it in correction territory, commonly defined as a decline of at least 10% from a recent peak.
The decline was especially sharp in chipmakers and companies tied to data center construction. The PHLX Semiconductor index fell 12.25%. Reuters reported Nvidia shares fell 9% and AMD shares fell 17%, while several data center operators lost more than 14%. The source report also said Amazon and Alphabet fell 2.2% and Microsoft dropped 3.6% on Thursday. Reuters reported that the VIX, a measure of expected market volatility, recorded its biggest increase since December 2024.
The election results prompted questions about whether new lawmakers and governors could alter the conditions for building data centers. The source report, citing Reuters and The National, said Democrats won control of both chambers of Congress and flipped several governorships. Analysts cited in those reports pointed to possible congressional hearings, changes to tax incentives, tighter permitting and requirements for developers to cover more of the electricity and water costs associated with projects. These are investor concerns and forecasts, not enacted changes to federal policy.
Infographic 01 · The day in numbers
The Nasdaq's worst day in 19 months
Chips and data center builders led the fall. The dollar figure in the headlines belongs to the Nasdaq-100, the 100 largest non-financial companies on the exchange.
Nasdaq Composite on Thursday, 5 November 2026: down 1,421.51 points to 24,315.00. The biggest one-day fall since 4 April 2025, 19 months earlier.
The five worst Composite days since March 2025
Daily change, closing values
Sources: Nasdaq Global Indexes (COMP, NDX, SOX closing data, retrieved 6 Nov 2026) · Reuters, 5 Nov 2026 (via The Straits Times). History checked back to 25 Mar 2025. Market value is Reuters’ calculation. Not investment advice.
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Election Results Put Data Center Costs in Focus
The market reaction shows that investors are treating AI infrastructure spending as exposed to political and regulatory risk, not just demand for chips and computing services. Data centers require large amounts of electricity, land and water, and their construction can depend on permits, grid connections and tax arrangements. Changes to any of those conditions could affect the pace or cost of planned projects.
For companies building or supplying data centers, a slower approval process or a higher share of infrastructure costs could change project schedules and expected returns. For communities and utility customers, the debate concerns local resource use, power prices and who pays for grid upgrades. The market losses, however, do not establish that projects will be canceled or that AI demand has fallen. The source material reports no evidence of a new collapse in demand as the immediate cause of the decline.
The figures also need to be read carefully: Reuters’ estimate of $2.5 trillion in lost market value applies to the Nasdaq-100, not all Nasdaq-listed shares. And the day’s fall reflects investor repricing amid uncertainty; it is not a direct measure of the eventual cost of regulation or the value of data center projects.
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From Midterm Results to Market Selloff
The sharp decline followed a mixed session on Wednesday, Nov. 4. The Nasdaq Composite rose 1.44% that day, according to the source report’s index data, even as Reuters reported that data center operators and power companies fell. Amazon and Microsoft each rose about 6% during that session. One explanation offered by a strategist to Reuters was that existing data centers could become more valuable if fewer new facilities were built. Thursday’s broad selloff reversed that view as technology shares came under pressure.
Investor concerns centered on the prospect that election outcomes could affect federal oversight as well as state and local decisions. The National reported that voters in several states backed incoming governors who had pledged pauses or restrictions on large data center projects. It also reported that local ballot measures in communities across 10 states largely opposed new projects. Those reports describe election outcomes and campaign positions; the precise legal effect of each result will depend on what officials do after taking office.
The Composite had already shown volatility before election day. The source report counted four sessions since mid-October when it fell by more than 500 points, before the Nov. 5 drop. It also reported that the index lost 5.3% in October. The Thursday move therefore landed amid broader market unease about technology valuations and the costs of expanding AI infrastructure.
“Existing data centers could become more valuable if fewer new ones get built.”
— A strategist quoted by Reuters
Policy Changes Remain Unsettled
No new federal law governing AI data center construction had passed at the time described in the source material. The reported election outcomes may bring more congressional scrutiny, but the scope and timing of hearings, legislation or regulatory action remain unknown. The president retains veto power, and analysts cited in the source material said divided government or legislative gridlock could limit major changes.
A UBS estimate cited in the source report suggested that about 30% of planned 2028 capacity additions could be at risk. That is an estimate, not a decision or a confirmed count of projects that will be stopped. The underlying assumptions and project-by-project effects are not detailed in the material. It is also unclear which campaign pledges will become formal policies, how utilities and regulators will respond, or how much of Thursday’s market fall reflected election concerns rather than other market pressures.
Governors and Congress Set the Next Tests
The next indicators will be whether incoming governors pursue the proposed pauses and whether state lawmakers, utility regulators or local governments change permitting, tax incentives, grid access or cost-sharing rules. The source material says governors can influence utility regulators and state incentives, but the timing and reach of any action will vary by state. Campaign commitments should not be treated as implemented policy until officials take formal steps.
At the federal level, investors will be watching for committee hearings, investigations or legislation after the new Congress takes office in January. Companies, utilities and communities may also clarify the status of individual projects as approvals and financing decisions proceed. Until those developments are reported, the potential effect on data center capacity—and whether it changes the economics of AI infrastructure—remains uncertain. The market figures describe one trading session, not a settled forecast for the sector.
Key Questions
How much did the Nasdaq fall on Nov. 5?
The Nasdaq Composite fell 5.52%, closing at 24,315.00. The Nasdaq-100 declined 6.36%, closing at 26,629.81.
What does the $2.5 trillion loss refer to?
Reuters estimated that the Nasdaq-100’s decline erased about $2.5 trillion in market value. The figure applies to the 100 largest non-financial companies in that index, not every Nasdaq-listed company.
Did the election change data center rules?
The source material reports election results and campaign pledges, but says no new federal law had passed. Any changes to state or local rules depend on actions officials take after taking office.
Could planned AI data center projects be delayed?
Analysts cited in the reporting said tighter oversight, permitting changes or higher power and water costs could put some projects at risk. A UBS estimate that about 30% of planned 2028 capacity additions could be at risk is a forecast, not confirmation that those projects will be canceled.
What happens next?
Attention turns to actions by incoming governors, utility regulators and the new Congress, including any hearings, policy proposals or state-level project pauses. The timing and effects of those steps are not yet clear.
Source: ThorstenMeyerAI.com
