The joy on Wall Street was short-lived. Just a day after US stock markets celebrated legislative election results with significant gains, the outlook has completely changed. Investors are selling technology stocks Especially at rates that are causing sharp declines among semiconductor manufacturers. Behind this movement we find a concern that goes beyond a bad trading day: the fear that the expansion of artificial intelligence will face obstacles and will not be able to maintain the growth rate expected by the market.
The magnitude of the drop is better understood when we tabulate the figures. According to data published by the Associated Press at 7:46 pm on Thursday, November 5, Spanish Peninsula time, the Nasdaq Composite fell 5.2%, while the S&P 500 lost 3.9% and the Dow Jones lost 3.1%. They refer to a session still open, not specific closing results, but they allow us to verify that selling is affecting the three major US indices. The punishment was particularly severe on the Nasdaq, where technology companies have significant weight.
The impact has also been felt in some of the companies that have benefited the most The rise of artificial intelligence. If we look at individual quotes, we find particularly pronounced losses in semiconductor manufacturers, but also in companies related to data centers. In that same Associated Press update, there were some declines recorded during the session.
- Nvidia: decreased by 8.7%.
- AMD: It has decreased by 15.5%.
- Corewave: 12.5% decrease.
- GE Vernova: 7.7% lost.
One of the concerns that helps to understand this scenario relates to the expansion of artificial intelligence and the funding needed to sustain the profitability that these investments can provide. As Reuters has documented, building data centers requires huge expenditures on processors, electrical infrastructure and cooling systems, with future revenues subject to uncertainty. Daniel Pinto, JPMorgan’s vice president, warned on Nov. 3, according to the firm, that the market can expect very rapid revenue and profit growth for companies involved with AI. A downward revision of these expectations could also affect manufacturers providing the technology required for this expansion.
Investors panic after election
Adding to this situation are the results of the November 3 US legislative elections. Democrats won majorities in both houses of Congress, which they will take control of in January 2027, and won in states like Texas and Georgia, which are critical for data center expansion. According to Reuters, investors They fear that greater oversight And potential state and local restrictions, particularly on permits, delay new installations. UBS analysts estimate that potential project suspensions could put at risk about 30% of additional capacity planned for 2028 in the US. This is an estimate for future projects, not for installations that are confirmed to be cancelled
Beyond these concerns, analysts are also trying to explain why the sell-off is so intense. Mark Hackett, Nationwide’s chief market strategist, told Reuters that the decline was largely driven by institutional selling and reductions in leveraged positions by hedge funds. Samir Samana of the Wells Fargo Investment Institute points to another possible shift in investor preferences: Capital may shift from companies valued for their growth potential to others capable of generating strong cash flows.
The question now is whether this stock market shock will have any effect beyond prices. Such a pronounced drop appears to reflect a significant shift in investor expectations, though it does not necessarily mean they are abandoning their expansion plans. To understand how far the problem goes, we need to test If projects start getting delayedAmong other reasons.
Picture | Romulo Queiroz
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