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TL;DR
The Nasdaq Composite fell 5.52% on Nov. 5, and Reuters estimated the Nasdaq-100’s 6.36% decline erased about $2.5 trillion in market value. Investors were weighing potential changes to AI data center permits, power costs and tax incentives after reported Democratic election gains, but no new federal rules have passed.
The Nasdaq Composite fell 5.52% on Nov. 5, its steepest one-day drop since April 2025, as investors assessed whether recent election results could bring tighter oversight or higher costs for AI data center projects. The Nasdaq-100 fell 6.36%; Reuters estimated that decline represented about $2.5 trillion in market value, a figure for the 100 largest non-financial Nasdaq companies rather than the entire exchange.
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. The Composite finished 11.9% below its Oct. 6 record, placing it in correction territory, commonly defined as a decline of at least 10% from a recent peak.
Technology and infrastructure-related shares fell particularly sharply. The PHLX Semiconductor Index dropped 12.25%. Reuters reported that Nvidia shares fell 9% and AMD fell 17%, while several data center operators lost more than 14%. Amazon and Alphabet declined 2.2% and Microsoft 3.6%, Reuters reported. The VIX, a measure of expected stock-market volatility, recorded its largest increase since December 2024, according to the news agency.
The market reaction followed reports of Democratic gains in Congress and in several governor’s races. Reuters and The National cited investor concerns that incoming officials could scrutinize data center development, affect project permits and utility decisions, or reduce tax incentives. Those are potential policy changes, not enacted restrictions. No new federal law governing the projects had passed as of the source report.
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 companies and their suppliers depend on continued investment in computing capacity. If new data centers become slower to approve or more expensive to build, investors may reassess expected growth for chipmakers, cloud providers, utilities and project developers. The sharp declines show that markets were responding not only to current earnings or demand, but also to uncertainty about the conditions for future construction.
The potential effects extend beyond technology stocks. Data centers require large amounts of electricity, land and water, and local decisions about permits and utility connections can shape where projects proceed. If developers must cover more infrastructure costs or lose tax advantages, some planned projects could be delayed, resized or reconsidered. The scale of any effect is not yet established; the market’s loss in value does not itself show that projects have been cancelled or that AI demand has weakened.
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From Election Results to Project Risks
The selloff followed a mixed market reaction over two sessions. The Composite rose 1.44% on Nov. 4, the day after the midterm elections. Reuters reported that some data center operators and power companies fell that day even as Amazon and Microsoft rose about 6% during the session. One explanation offered to Reuters was that existing facilities might become more valuable if fewer new ones are built. That interpretation reversed on Nov. 5, when major technology stocks also declined.
The National reported Democratic victories in five gubernatorial races—Texas, Georgia, Ohio, Iowa and Nevada—and cited its analysis of Cleanview project data showing those states account for 37% of planned U.S. data center capacity, with Texas representing 22.8%. It also reported that incoming governors in Texas, Georgia and Ohio had pledged pauses or moratoriums on large projects. These are reported campaign commitments; their scope, legal authority and implementation remain to be seen.
The source report also counted 46 of 47 local data center ballot measures in ten states as opposing projects, based on unofficial results. That tally, along with state-level commitments, indicates political pressure around development, but it does not establish a nationwide ban. Analysts cited by Reuters expected more congressional hearings and oversight. The source report also noted that the president retains veto power and that some analysts anticipate gridlock.
“The idea was that existing data centers become more valuable if fewer new ones get built.”
— A strategist quoted by Reuters
Policy Proposals Are Not Yet Rules
The selloff reflected investor expectations, but the eventual policies and their effects are unsettled. The source material reports election results and campaign pledges, not enacted state moratoriums or new federal data center restrictions. It remains unclear which proposals will become policy, how regulators and legislatures would implement them, and whether projects would be cancelled or simply delayed.
The reported UBS estimate that roughly 30% of planned 2028 capacity additions could be at risk is a forecast, not a verified outcome. The source material does not establish how many projects would be affected, what the estimate assumes, or how much of the Nasdaq-100’s market-value decline was directly attributable to data center policy concerns rather than other market factors. The $2.5 trillion figure is Reuters’ estimate for the Nasdaq-100, not a measure of realized losses for all Nasdaq-listed firms.
Watch Permits, Hearings and Grid Decisions
Investors and project developers will be watching whether incoming governors pursue their campaign commitments, whether local measures take effect, and how state utility regulators handle electricity rates and grid connections. Congressional hearings or investigations could clarify the direction of oversight, but the source material gives no confirmed schedule for specific actions.
The next evidence of a lasting change will be formal legislation, regulations, permit decisions or project announcements—not election rhetoric alone. In the meantime, market moves may continue to reflect shifting expectations about the cost and pace of AI infrastructure construction. The available information does not establish when those questions will be resolved.
Key Questions
What does the $2.5 trillion figure refer to?
Reuters estimated that the Nasdaq-100’s 6.36% decline on Nov. 5 represented about $2.5 trillion in market value. The Nasdaq-100 tracks 100 large non-financial companies listed on Nasdaq; the figure is not a loss estimate for every Nasdaq-listed stock.
Why did AI data center rules affect technology stocks?
Investors considered whether tighter oversight, changes to tax incentives, or higher electricity and infrastructure costs could slow or raise the cost of building data centers. Those concerns could affect expectations for chipmakers, cloud companies and developers, but they do not confirm that construction has stopped.
Have new federal restrictions on data centers passed?
No. The source report states that no new federal law had passed. The concerns described were tied to anticipated scrutiny and campaign pledges, with the details and implementation still uncertain.
Does the UBS estimate mean 30% of data centers will be cancelled?
No. The cited estimate says about 30% of planned 2028 capacity additions could be at risk. It is a forecast, not confirmation that a particular share of projects will be cancelled.
Source: ThorstenMeyerAI.com
