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TL;DR
The Nasdaq Composite fell 5.52% on Nov. 5, while the Nasdaq-100 dropped 6.36%; Reuters put the latter index’s lost market value at about $2.5 trillion. The selloff followed U.S. midterm election results that raised investor concerns about future data center permits, power costs and tax incentives, but no new federal rules have been enacted.
The Nasdaq Composite fell 5.52% on Nov. 5, and the Nasdaq-100 lost 6.36%, as investors weighed U.S. midterm results that could bring greater scrutiny and higher costs for planned AI data centers. Reuters estimated that the Nasdaq-100 decline erased about $2.5 trillion in market value; the figure applies to that index’s 100 largest non-financial companies, not every stock listed on Nasdaq. No new federal data center restrictions have been passed.
Nasdaq’s published closing data put the Composite at 24,315.00, down 1,421.51 points, and the Nasdaq-100 at 26,629.81, down 1,807.36 points. The Composite’s decline was its largest since April 4, 2025, when it fell 5.82% during the tariff shock, according to the source’s comparison of index data. It closed 11.9% below its Oct. 6 record, placing it in correction territory, commonly defined as a fall of at least 10% from a recent peak.
The selloff was concentrated in chipmakers and companies connected to data center construction. The PHLX Semiconductor index dropped 12.25%. Reuters reported that Nvidia fell 9% and AMD 17%, while several data center operators lost more than 14%. Amazon and Alphabet declined 2.2% and Microsoft 3.6%, according to Reuters. Reuters also reported that the VIX, a measure of expected market volatility, recorded its largest increase since December 2024.
The election-related concerns center on who will approve projects and determine their costs. Analysts cited by Reuters and The National pointed to possible congressional hearings, changes to tax incentives, and greater requirements for developers to cover electricity and water costs. The National also reported that incoming governors in some states had pledged pauses on large projects. Those policy risks are investor concerns and reported campaign positions, not enacted 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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How Data Center Costs Could Change
The market reaction reflects the scale of planned investment in computing infrastructure and the dependence of AI companies on reliable, affordable power. If permits take longer, tax incentives shrink or developers must pay more for grid connections and utilities, some projects could become more expensive or be delayed. That could affect data center operators and suppliers, as well as the technology companies building or renting computing capacity.
But a one-day stock decline does not establish that construction will slow or that AI demand has weakened. The reported trigger was concern about future policy, while the effects on project timelines and company earnings remain uncertain. Investors are repricing a risk, not responding to a confirmed nationwide change in data center law.
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Election Results and Project Approvals
The selloff followed a two-session shift in market sentiment. The Composite rose 1.44% on Nov. 4. Reuters reported that data center operators and power companies fell that day even as Amazon and Microsoft each gained about 6% during the session. One explanation offered to Reuters was that existing data centers might gain value if fewer new facilities are built. On Nov. 5, that interpretation gave way to a broader retreat across technology stocks.
The source reports that Democrats won control of both chambers of Congress and flipped five governorships: Texas, Georgia, Ohio, Iowa and Nevada. The National attributed to its analysis of Cleanview project data the estimate that those states account for 37% of planned U.S. data center capacity, with Texas accounting for 22.8%. It also reported campaign pledges by incoming governors in Texas, Georgia and Ohio to pause or limit large projects. Those figures and pledges are attributed reporting; they do not mean projects have already been cancelled.
State and local decisions can matter because governors appoint utility regulators and states influence tax incentives, while local authorities often have a role in siting and permits. The source also reports that 46 of 47 local ballot measures related to data centers went against projects in unofficial results. The available material does not provide a full measure-by-measure breakdown, so that tally should be treated as a reported count rather than a finalized national policy outcome.
“The idea was that existing data centers become more valuable if fewer new ones get built.”
— A strategist quoted by Reuters
Policy Risks Are Not New Rules
It is not yet clear whether the election results will lead to changes in federal or state policy, or whether proposed pauses will be enacted. The source says no new federal law has passed and notes that President Donald Trump retains veto power; analysts cited there expect possible gridlock rather than sweeping changes. Congressional scrutiny could increase without producing new restrictions.
A UBS estimate cited in the source suggests that about 30% of planned 2028 capacity additions could be at risk. That is a forecast, not a government decision or a confirmed count of cancelled projects. The underlying assumptions and the specific projects included are not detailed in the supplied material. The immediate market decline also does not show how much was caused by election concerns rather than other investor considerations.
Permits, Hearings and Project Costs
Investors and data center developers will be watching for concrete steps from incoming governors, state utility regulators, local governments and the new Congress. Relevant developments include whether proposed pauses become formal policy, whether permitting or grid connection rules change, and whether lawmakers hold hearings or advance legislation.
For now, the next evidence will come from actual project approvals, construction schedules and company disclosures about power, water and capital costs—not campaign pledges alone. The market impact of the election remains developing, and the available reporting does not establish that planned AI data center capacity has already been reduced.
Key Questions
What does the $2.5 trillion figure refer to?
Reuters estimated that the Nasdaq-100’s Nov. 5 decline erased about $2.5 trillion in market value. The figure refers to the index of 100 large non-financial Nasdaq-listed companies, not the entire Nasdaq market.
How much did the Nasdaq Composite fall?
The Composite closed at 24,315.00 on Nov. 5, down 1,421.51 points, or 5.52%, according to Nasdaq closing data cited in the source.
Did the election immediately impose new data center restrictions?
No. The material says no new federal law has passed. The market reaction reflected concerns about potential oversight, permits and costs, alongside reported campaign pledges for pauses in some states.
Why could state elections affect data center projects?
States influence tax incentives and utility regulation, including decisions that can affect electricity prices and grid connections. Governors and local authorities can also shape project approvals, but the specific effects depend on future decisions.
Is the estimate that 30% of 2028 capacity is at risk confirmed?
No. It is a UBS estimate cited in the source, not a confirmed cancellation figure or a policy decision. The supplied material does not detail the estimate’s assumptions.
Source: ThorstenMeyerAI.com
