Nasdaq Sinks 5% as US Midterm Shock Rattles AI Stocks; Nvidia and Oracle Lead Selloff

The Quick Take

• The Nasdaq 100 sank more than 5% to around 24,416 points after US midterm election results rattled AI-related technology stocks
• Nvidia, Oracle, and SpaceX shares were among the hardest hit as investors reassessed the regulatory and policy outlook for AI infrastructure post-election
• Chipmakers Nvidia and Broadcom led losses in what traders described as 'blood in the streets' selling pressure in the tech sector

The Nasdaq 100 index fell more than 5% to approximately 24,416 points following US midterm election results, with AI-related technology stocks bearing the brunt of the selloff as the market reassessed the post-election regulatory environment. The index's sharp decline was driven by concentrated selling in semiconductor and software companies including Nvidia and Oracle, which had been primary beneficiaries of AI infrastructure spending narratives. SpaceX-adjacent stocks were also cited as under pressure, suggesting that companies benefiting from policy support under the previous administration faced particular investor concern about the new political landscape.

The scale of the selloff—more than 5% in a single session—reflects the degree to which AI infrastructure valuations had incorporated favorable policy expectations. When those expectations were recalibrated by the election outcome, the crowded positioning in AI and semiconductor stocks amplified the downward move. For sector participants, the volatility creates a bifurcated risk environment: companies with strong fundamentals independent of government contracts face a path to recovery, while those relying heavily on federal AI spending may face prolonged re-rating. The concentration in semiconductor bellwethers like Nvidia as the primary transmission mechanism underscores the index's vulnerability to single-sector corrections.

Forward catalysts for Nasdaq recovery include corporate earnings updates from major technology companies confirming commercial AI revenue traction independent of government programs, and any clarity on the new administration's approach to AI regulation and infrastructure investment. The macro variable underpinning the index's direction is Federal Reserve rate policy: technology valuations are highly sensitive to discount rates, and any inflationary signals from fiscal policy changes could extend the derating. Investors should track semiconductor order book data from TSMC and other foundries as a real-economy signal of whether AI capex continues despite the political uncertainty.

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