Business & Finance
Tech stock rout after midterms wipes $3.2tn from US market
The Nasdaq fell 5.5% and the S&P 500 fell 4.4% on Thursday, and the sell-off has been attributed to the Democrats' midterm victory.
The short version
- US stocks lost more than $3.2tn on Thursday as the Nasdaq fell 5.5% and the S&P 500 fell 4.4%.[The Guardian]
- The sell-off has been attributed to the Democrats' sweeping midterm victory, not a confirmed cause.[The Guardian]
- Valuations were already elevated, with the cyclically adjusted price-to-earnings ratio at its highest level since 2000.[The Guardian]
- Capital Economics is less confident AI revenues will keep pace with current investment, which Goldman Sachs projects at $1 trillion in 2026.[CBS News · BBC News]
Key facts
- More than $3.2tn was wiped from the US stock market on Thursday, with the Nasdaq down 5.5% and the S&P 500 down 4.4%.[The Guardian]
- The sell-off has been attributed to the Democrats' sweeping US midterm election victory.[The Guardian]
- The cyclically adjusted price-to-earnings ratio had risen to its highest level since 2000.[The Guardian]
- Goldman Sachs research projects AI investment to reach $1 trillion in 2026.[BBC News]
- A Gallup poll published in May found 71% of Americans would oppose a data centre in their community.[BBC News]
- Capital Economics' Vicky Redwood says the firm expects AI to boost productivity but is less confident AI revenues will grow fast enough to sustain current investment.[CBS News]
- US employers added 165,000 jobs last month and the unemployment rate ticked down to 4.1%.[CBS News]
What remains uncertain
- Whether the sell-off marks a lasting downturn or a temporary reset is not established by the reporting.[CBS News · The Guardian]
- The link between the midterm result and the sell-off is attributed to unnamed sources or analysis, not independently confirmed in the reporting.[The Guardian]
Sources
Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.
- US tech stock rout: is the AI bubble bursting?The Guardian - US
- Stocks rebound after tech selloff that pushed Nasdaq into correctionCBS News - US
- Could the US midterms burst the AI bubble?BBC News - Business
- $2.5T has been wiped from US stocksHacker News
- Nasdaq sell-off batters Asian chip stocks as SK Hynix, Samsung, Softbank, TSMC tumbleCNBC
- Asian stocks slump after US tech rout amid AI jittersDeutsche Welle
- AI stocks climb after trillions wiped from market valuesBBC News - Top Stories
- From the front row to the hot seat — what the midterms mean for Big TechTechCrunch
- From high-flying AI stocks to tariff-hit alcohol companies, the midterms shook up Wall StreetABC News - Business
- From high-flying AI stocks to tariff-hit alcohol companies, the midterms shook up Wall StreetAssociated Press
- AI stocks halt their brutal, worldwide sell-off as Wall Street trims its loss for the weekAssociated Press
- Asian stock markets climb after earlier tech routAl Jazeera