Wall Street Loses $2.5 Trillion in Broad Selloff Following Midterm Elections

WASHINGTON, Nov 6 (OPA) — Wall Street indexes experienced their worst single-day decline since April 2025 as a broad selloff swept across every sector in the S&P 500, which fell 4.3 percent. Shares of major semiconductor and AI hardware suppliers plummeted sharply on Thursday. Nvidia dropped 9.3 percent, Broadcom fell 10.5 percent, and Qualcomm finished down 9.5 percent. The market turbulence wiped out trillions in paper losses, affecting retirement accounts and major institutional portfolios nationwide.

Analysts pointed to a combination of high market leverage and shifting political control in Washington as catalysts for the financial carnage. Margin debt reached a record $1.5 trillion in June, reflecting speculative levels not seen since the dot-com bubble, while U.S. households held a record 48 percent of their financial assets in stocks. eToro analyst Jakub Rochlitz noted that the midterm results served as the tipping point following weaker-than-expected growth numbers from AI firms Anthropic and OpenAI earlier in October. Former Goldman Sachs analyst Nic Puckrin added that the election outcome acted as the gust of wind that toppled an already shaky market.

Elon Musk faced severe financial impacts, sustaining a combined $152 billion in paper losses across Tesla and SpaceX following the election. Tesla shares dropped nearly 12 percent on Thursday, bringing its two-day post-election loss to roughly 15 percent, while SpaceX shares fell more than 12 percent. Musk had spent nearly half a billion dollars supporting Republican candidates during the 2026 midterms. The market downturn stands in stark contrast to brief initial gains on Wednesday morning when some investors had anticipated different legislative gridlock outcomes.

Democratic congressional leaders have signaled plans to pursue stricter AI regulations, including mandatory safety testing, federal oversight of advanced models, restrictions on data-center expansion, and protections against rising electricity bills. Local ballot measures across the country also showed growing public pushback against data center construction, featuring energy restrictions and outright moratoriums. Market experts note it will take months to gauge the long-term impact of potential policy changes on capital expenditures and infrastructure development within the technology sector.