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TL;DR
The Nasdaq Composite dropped 5.52% on Nov. 5, its largest one-day decline since April 2025, while the Nasdaq-100 fell 6.36%. Election results prompted investors to reassess the cost and pace of AI data center projects, but proposed policy changes remain uncertain and no new federal law has passed.
The Nasdaq Composite fell 5.52% on Thursday, Nov. 5, its biggest one-day decline in 19 months, as investors reassessed the risks and costs of building AI data centers after Democrats won control of Congress and several governorships. The Nasdaq-100 dropped 6.36%; Reuters estimated that the fall erased about $2.5 trillion in market value from the 100 largest non-financial companies on the exchange.
Nasdaq’s published closing data put the Composite at 24,315.00, down 1,421.51 points. Its last larger daily percentage decline was a 5.82% fall on April 4, 2025, during the tariff-related market shock. The Nasdaq-100 closed at 26,629.81, down 1,807.36 points. The $2.5 trillion estimate reported by Reuters applies to the Nasdaq-100, not to every stock listed on Nasdaq.
Technology and infrastructure stocks tied to AI were among the hardest hit. The PHLX Semiconductor index fell 12.25%. Reuters reported that Nvidia shares fell 9% and AMD shares dropped 17%, while several data center operators lost more than 14%. Amazon and Alphabet each fell 2.2% and Microsoft declined 3.6% on Thursday, after the companies had risen during Wednesday’s session.
The Composite closed 11.9% below its Oct. 6 record, meeting the usual definition of a market correction: a decline of at least 10% from a recent peak. Reuters also reported that the VIX, a gauge of expected market volatility, had its largest increase since December 2024. The index decline and stock moves are observed market results; explanations linking them to election-driven policy risk reflect investor concerns, not enacted changes to data center rules.
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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AI Projects Face Higher Policy Risk
The selloff shows that investors are weighing more than demand for AI services. Data centers require large amounts of electricity, water and land, as well as grid connections, permits and tax arrangements. If projects face longer approval timelines or developers must cover more infrastructure costs, construction could become slower or less profitable. That would affect utilities, chipmakers, data center operators and technology companies planning new capacity.
State officials can influence siting decisions, incentives and utility regulation, while Congress can hold hearings and shape federal policy. Reuters and The National reported that analysts expect greater scrutiny of the build-out following the election. But market losses on one day do not establish that projects will be cancelled or that AI demand has weakened. They indicate that investors are pricing in a wider range of possible costs and delays.
One UBS estimate cited in the source material says about 30% of planned data center capacity additions for 2028 could be at risk. That is a forecast, not a confirmed reduction in capacity or an official government decision. The distinction matters for businesses making multiyear investment plans and for investors trying to separate policy risk from changes in technology demand.
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Election Results and Market Moves
The market’s reaction unfolded over two sessions. On Wednesday, Nov. 4, the Composite rose 1.44%. Reuters reported that some data center operators and power companies fell that day, while Amazon and Microsoft each gained about 6% during the session. One explanation offered to Reuters by a strategist was that existing facilities could become more valuable if fewer new ones were built. On Thursday, technology shares broadly fell, including the major cloud and AI companies.
Reuters and The National linked the shift in sentiment to Democrats winning control of both chambers of Congress and flipping several governorships. According to The National, five governorships changed party, including Texas, Georgia, Ohio, Iowa and Nevada. Its analysis of Cleanview project data said those states account for 37% of planned U.S. data center capacity, with Texas representing 22.8%. Those figures describe planned capacity, not operating facilities.
The National reported that incoming governors in Texas, Georgia and Ohio had discussed pauses or limits on large data center projects; the incoming Texas governor also promised a moratorium and greater community input, according to the outlet. Local ballot measures in multiple states also drew opposition to projects, though the source describes results as unofficial. Such reported positions help explain investor concern, but they are not equivalent to enacted statewide restrictions.
“The Nasdaq’s “deepest one-day drop since ‘Liberation Day’ in April 2025.””
— Reuters, describing Thursday’s market move
Policy Changes Remain Unsettled
It is not yet clear whether the election results will lead to new laws, formal project pauses or changes to utility rules. No new federal law has passed to restrict data center construction, and the president retains veto power. Analysts cited in the source material expect congressional gridlock may limit sweeping federal changes.
The status and scope of the governors’ reported pledges, the outcome of local measures described as unofficial, and any resulting project decisions remain developing. The cited estimate that 30% of planned 2028 capacity could be at risk is a UBS forecast, not a confirmed count of cancelled projects. Nor does the one-day market decline show that demand for AI computing has fallen; the source describes investor concern about the cost and pace of construction.
Investors Watch Permits and Power
Investors and developers will be watching whether incoming governors pursue the policies reported during their campaigns, and whether state regulators alter approvals, electricity pricing or grid connections. Congressional hearings or investigations could provide an early signal of how much oversight lawmakers intend to apply, though the timing and scope of any action are not established in the available reporting.
For now, the next evidence will come from official policy decisions and company disclosures: whether projects are paused, permits delayed, incentives changed or developers asked to pay more for power and water infrastructure. Until those details emerge, the relationship between the election, future data center capacity and Thursday’s market losses remains an investor interpretation rather than a settled outcome.
Key Questions
How much did the Nasdaq fall on Nov. 5?
The Nasdaq Composite fell 5.52% to 24,315.00, down 1,421.51 points. The Nasdaq-100 fell 6.36% to 26,629.81.
What does the reported $2.5 trillion loss refer to?
Reuters’ estimate refers to market value erased from the Nasdaq-100, which tracks 100 large non-financial companies on the exchange. It is not a measure of losses across every Nasdaq-listed stock.
Did the election change data center rules?
No new federal law had passed as of the reporting date. Some incoming governors were reported to have promised pauses or other limits, but those pledges were not yet the same as regulations in force.
Does the selloff prove that demand for AI is falling?
No. The reported concern centered on the cost, oversight and pace of data center construction. The market decline alone does not establish a drop in AI demand.
What could make the risk to data center projects clearer?
Formal state or federal actions, changes to permits and utility rules, project announcements, and company disclosures about costs or delays would show whether the concerns are affecting construction plans.
Source: ThorstenMeyerAI.com
