by Coinstrooper Crypto Articles
Quick Take
  • US stocks shed roughly $2 trillion in market value within an hour of Thursday’s open.
  • Chipmakers led the sell-off on fears that Democrats will slow America’s AI data center boom.
  • The S&P 500 fell 1.8% in the first 30 minutes, wiping out Wednesday’s post-midterm gain, its best day in three months.
  • Its losses later topped 3%, the worst intraday drop since April 2025.

What Happened

Tech stocks entered the week weak. The Nasdaq-100 lost roughly $2 trillion in October as investors questioned the cost of AI, BeInCrypto reported.

Market Context

US stocks shed roughly $2 trillion in market value within an hour of Thursday’s open. Chipmakers led the sell-off on fears that Democrats will slow America’s AI data center boom.

Why Is the US Stock Market Crashing Today?

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 the AI chips made by Nvidia, AMD, and Broadcom.

Rising memory chip costs have pushed up phone prices. Global smartphone shipments fell 20% in the September quarter to a 14-year low, according to Counterpoint Research.

On Wednesday, Oracle and Marvell fell on plans to fund their AI build-outs, as Jim Cramer said he was waiting for capitulation before buying tech.

The data center pledges landed on a market already worried about whether AI spending will pay off.

Chip stocks took the heaviest losses in early trading, TradingView data showed. AMD fell nearly 15%, and Qualcomm dropped almost 12%.

Why It Matters

“…margin outlook is lousy,” said Stacy Rasgon, analyst at Bernstein.

Details

The S&P 500 fell 1.8% in the first 30 minutes, wiping out Wednesday’s post-midterm gain, its best day in three months. Its losses later topped 3%, the worst intraday drop since April 2025.

The tech-heavy Nasdaq slid into correction territory, meaning 10% or more below its recent peak, while the Dow fell 1,000 points.

Three pressures hit chip and AI stocks at the same time.

1. Democrats Threaten America’s AI Data Center Boom

Democrats won both chambers of Congress on Tuesday and flipped governor’s races in Texas, Georgia, and Ohio.

All three governors-elect ran against fast data center growth. In Texas, Gina Hinojosa, who beat Gov. Greg Abbott, pledged a moratorium on new construction and an end to subsidies for big developers.

Georgia’s Keisha Lance Bottoms promised a temporary statewide pause to study the effect on electricity bills. Ohio’s Amy Acton wants new projects blocked unless developers pay all their own utility costs.

“Tech needs to adjust and focus on a slower pace of this AI rollout,” Fortune reported, citing tech analyst at YorkVille Ives Dan Ives.

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2. Qualcomm’s Phone Chip Sales Fell 26%

Qualcomm reported late Wednesday that handset chip revenue dropped 26% to $5.14 billion, missing analyst estimates.

Qualcomm shares fell almost 12% on Thursday, dragging other chipmakers with them.

3. AI Spending Doubts Were Already Building

Which Stocks Are Falling the Most?

Micron lost about 15%, Tesla about 10%, and Broadcom nearly 5%. Nvidia, the largest US chipmaker, traded between 7% and 8% lower.