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TL;DR
The Nasdaq Composite fell 5.52% on Nov. 5, its sharpest one-day decline since April 2025, while the Nasdaq-100 dropped 6.36%. Investors reacted to election results that could bring more scrutiny of data center projects, but the potential policy changes remain uncertain; no new federal law has passed.
The Nasdaq Composite fell 5.52% on Thursday, Nov. 5, closing at 24,315, as investors weighed whether election results could make the U.S. AI data center build-out slower or more expensive. The Nasdaq-100 dropped 6.36%, and Reuters estimated that the decline erased about $2.5 trillion in market value from the index’s 100 largest non-financial companies.
Nasdaq’s published closing data shows the Composite lost 1,421.51 points, while the Nasdaq-100 fell 1,807.36 points to 26,629.81. The Composite’s one-day drop was its steepest since April 4, 2025, when it fell 5.82% amid a tariff-driven market shock. The index ended 11.9% below its Oct. 6 record, putting it in correction territory, commonly defined as a decline of at least 10% from a recent peak.
The pressure was especially heavy in semiconductors and companies tied to data center construction. The PHLX Semiconductor index fell 12.25%. Reuters reported that Nvidia shares dropped 9% and AMD shares fell 17%, while several data center operators lost more than 14%. Large technology companies also declined: Reuters said Amazon and Alphabet each fell 2.2%, and Microsoft dropped 3.6% on Thursday.
The market move followed a more mixed session on Wednesday, Nov. 4. The Composite rose 1.44% that day, even as Reuters reported declines among some data center operators and power companies. The selloff broadened on Thursday, when the companies expected to build and supply AI infrastructure fell alongside major technology firms. Reuters also reported that the VIX, a measure of expected stock-market volatility, recorded its largest increase since December 2024.
Infographic 01 · The day in numbers
The Nasdaq's worst day in 19 months
Chips and data center builders led the fall. The dollar figure in the headlines belongs to the Nasdaq-100, the 100 largest non-financial companies on the exchange.
Nasdaq Composite on Thursday, 5 November 2026: down 1,421.51 points to 24,315.00. The biggest one-day fall since 4 April 2025, 19 months earlier.
The five worst Composite days since March 2025
Daily change, closing values
Sources: Nasdaq Global Indexes (COMP, NDX, SOX closing data, retrieved 6 Nov 2026) · Reuters, 5 Nov 2026 (via The Straits Times). History checked back to 25 Mar 2025. Market value is Reuters’ calculation. Not investment advice.
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Election Results Put Data Center Costs in Focus
The market’s concern is not that demand for AI has collapsed. It is that the cost and pace of building data centers could change if elected officials, regulators and local communities impose new conditions. Large projects depend on permits, grid connections, electricity and water, and in some cases tax incentives. Changes to any of those inputs could affect projected costs and construction timelines for developers and the companies investing in AI infrastructure.
Democrats won control of both chambers of Congress, according to the source report, and will take committee leadership roles in January. Analysts cited by Reuters expect more hearings and investigations into the AI build-out. The National reported that Democrats also won several governorships in states with significant planned data center capacity, and that incoming governors have discussed pauses or moratoriums on large projects. These are potential policy shifts, not evidence that existing projects have been halted.
For investors, the selloff shows how sensitive valuations can be to expectations about future infrastructure spending. The immediate question is whether political scrutiny leads to concrete rules that raise costs or delay projects. The market reaction alone does not establish that those outcomes will happen, and it does not indicate whether AI-related investment will ultimately rise or fall.
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The Policy Changes Investors Are Watching
The election results affected several layers of government involved in data center development. Congress can hold hearings and shape federal policy, while state governments influence permitting, utility regulation and incentives. Governors appoint utility regulators who can affect electricity rates and grid connections, and local governments make decisions about land use and project approvals. That means a change in political control can alter the policy environment without immediately changing the status of every project.
The National reported that Democrats flipped five governorships—Texas, Georgia, Ohio, Iowa and Nevada—and said its analysis of Cleanview project data put 37% of planned U.S. data center capacity in those states, with Texas accounting for 22.8%. The outlet also reported campaign promises in Texas, Georgia and Ohio to pause or limit large projects. Those figures and commitments are attributed to The National; their implications depend on what the incoming administrations do after taking office.
The source report also describes 46 of 47 local data center measures in ten states as opposing new projects, based on unofficial results. Those measures reportedly included bans, size limits and pauses. Separately, it cites a UBS estimate that about 30% of planned 2028 capacity additions could be at risk. That is a forecast, not a government decision or a confirmed tally of canceled construction.
“The Nasdaq’s deepest one-day drop since ‘Liberation Day’ in April 2025.”
— Reuters, describing Thursday’s market move
No New Federal Rules Have Passed
The policy consequences remain uncertain. The source report says no new federal law has passed, and President Donald Trump retains veto power. Analysts cited in the report expect political gridlock could limit sweeping federal changes. The election results therefore point to possible oversight and state-level policy shifts, rather than a confirmed nationwide change in data center rules.
It is also not clear which proposed pauses, moratoriums or local restrictions will be adopted, how they would apply to projects already under way, or whether utility and permitting decisions will change. The 30% UBS figure concerns planned 2028 capacity additions and is an estimate; the available material does not establish how many projects face a firm cancellation or delay. The market’s sharp decline reflects investor concern, not proof of the eventual cost or scale of new restrictions.
Watch Hearings, Permits and State Plans
Investors and data center developers will be watching for the incoming governors’ specific proposals, state decisions on utility regulation and incentives, and any local measures that become final. In Congress, committee hearings or investigations could clarify lawmakers’ priorities, although additional oversight would not by itself constitute a new law.
For markets, upcoming company updates may show whether developers are changing spending plans or whether the election-driven concerns remain expectations rather than operational changes. The next clearer evidence will come from enacted rules, permitting decisions and project announcements. Until then, the size of any effect on construction costs, capacity and company earnings remains unsettled. Stock prices can be volatile, and investors can lose money; this report is not investment advice.
Key Questions
How much did the Nasdaq fall on Nov. 5?
The Nasdaq Composite fell 5.52%, losing 1,421.51 points and closing at 24,315. The Nasdaq-100 fell 6.36% to 26,629.81.
What does the reported $2.5 trillion loss refer to?
Reuters attributed the estimated $2.5 trillion in lost market value to the Nasdaq-100, an index of the exchange’s 100 largest non-financial companies. It does not represent every stock listed on Nasdaq.
Why were AI data centers linked to the selloff?
Investors considered whether election outcomes could lead to more oversight or changes to permits, power costs, water use and tax incentives for data center projects. These are concerns about possible future conditions, not confirmed new restrictions.
Have data center projects been halted by new federal rules?
The source report says no new federal law has passed. Some incoming officials have reportedly proposed pauses or moratoriums, but whether those plans will become policy and how they would affect individual projects remain unclear.
Source: ThorstenMeyerAI.com
