US President Donald Trump has blamed Democrats for the massive Wall Street sell-off that wiped out more than $1 trillion in market value on Thursday, November 5.
The crash followed the US midterm election results, with technology and artificial intelligence (AI) stocks suffering the biggest losses. Trump claimed the election outcome had damaged investor confidence, even as concerns over AI investments and possible regulatory restrictions weighed heavily on markets.
The sell-off erased the gains recorded after the elections, pushing major US indices to their worst single-day performance since April 2025.
The technology-heavy Nasdaq led the decline as investors dumped AI-related stocks amid concerns over high valuations and rising investment costs.
Key market movements:
Nasdaq Composite: Plunged 5.5%, entering correction territory.
Dow Jones: Lost more than 1,800 points, falling over 3%.
S&P 500: Declined more than 4%, its worst performance since April 2025.
Russell 2000: The small-cap index also entered correction territory.
The Magnificent Seven, comprising Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla, collectively lost more than $1 trillion in market capitalisation.
Major technology stocks suffered sharp declines:
Nvidia: Shares crashed over 9%, wiping out nearly $450 billion in market value.
Qualcomm: Fell more than 9% following a disappointing earnings forecast.
CoreWeave: Extended its losses for a second consecutive session.
Investors are increasingly concerned about whether massive spending on AI data centres, semiconductor infrastructure and computing capacity will generate adequate returns.
In a Truth Social post, Trump described the market crash as one of the worst days in Wall Street history, directly linking it to the election results.
He accused Democrats of causing losses to investors, including Americans holding retirement savings through 401(k) plans.
However, the sell-off also reflected growing concerns over stretched technology valuations, financing costs and uncertainty surrounding AI regulation.
Wall Street's concerns intensified after several Democratic politicians called for restrictions on AI infrastructure development.
Key developments:
Bernie Sanders: Called for a nationwide moratorium on new data centres.
Yassamin Ansari: Identified pausing AI development as a legislative priority.
Greg Casar: Supported stronger restrictions on AI expansion.
Gina Hinojosa: The newly elected Texas governor had advocated restrictions on data centre approvals.
According to Wells Fargo estimates cited in the report, Texas accounts for approximately 27% of planned US data centre capacity.
Restrictions could affect chipmakers, cloud computing providers and companies supplying equipment to AI facilities.
The US sell-off triggered heavy losses across Asian markets on Friday, November 6.
South Korea: Kospi plunged as much as 8.8%, triggering a circuit breaker.
Samsung and SK Hynix: Shares fell more than 6% each.
Japan: Nikkei declined 5.7%.
Taiwan: Technology stocks faced intense selling pressure.
The global technology sell-off could increase volatility in Indian equities, particularly IT stocks with significant exposure to US clients.
Foreign institutional investment flows may also face pressure if investors reduce exposure to emerging markets.
The immediate concern is whether the AI-led correction remains confined to technology stocks or spreads across global financial markets.