Red Candles, Hard Exit: Wall Street’s $2 Trillion AI Meltdown

US stocks shed roughly $2 trillion in market value within an hour of Thursday’s open on November 5, 2026, as fears that Democrats will slow America’s AI data center boom drove a sharp sell-off. The S&P 500 fell 1.8% in the first 30 minutes, wiping out Wednesday’s post-midnight gain—its best day in three months—before losses topped 3%, the worst intraday drop since April 2025. The Nasdaq fell 5.3%, the S&P 500 dropped 3.5%, and the chip index tumbled 11.2%, its worst performance since March 2020. The Nasdaq entered correction territory, at least 10% below its recent peak, while the Dow fell 1,000 points.

Democrats won both chambers of Congress on Tuesday and flipped governor’s races in Texas, Georgia, and Ohio, where all three governors-elect opposed rapid data center growth. Texas Governor-elect Gina Hinojosa pledged a moratorium on new construction and an end to subsidies for large developers. Georgia Governor-elect Keisha Lance Bottoms promised a temporary statewide pause to study the effect on electricity bills, while Ohio Governor-elect Amy Acton wants new projects blocked unless developers cover all their utility costs. Texas alone is projected to hold nearly 30% of US data center capacity by 2028, according to a Bloom Energy report cited by Fortune. Data centers are the main buyers of AI chips made by Nvidia, AMD, and Broadcom. Dan Ives, longtime tech analyst at YorkVille, told Fortune, “Tech needs to adjust and focus on a slower pace of this AI rollout.”

Qualcomm reported late Wednesday that handset chip revenue fell 26% to $5.14 billion, missing analyst estimates as rising memory chip costs pushed up phone prices. Global smartphone shipments fell 20% in the September quarter to a 14-year low, according to Counterpoint Research. Qualcomm shares fell almost 12% on Thursday, dragging other chipmakers lower. “...margin outlook is lousy,” said Stacy Rasgon, analyst at Bernstein.

AI spending doubts intensified an existing tech downturn. The Nasdaq-100 lost roughly $2 trillion in October as investors questioned the cost of AI, BeInCrypto reported. On Wednesday, Oracle and Marvell fell on plans to fund their AI build-outs, while Jim Cramer said he was waiting for capitulation before buying tech. TradingView data showed AMD down nearly 15%, Qualcomm down almost 12%, Micron down about 15%, Tesla down about 10%, and Broadcom down nearly 5%. Nvidia, the largest US chipmaker, traded between 7% and 8% lower.