US Stock Markets Suffer Biggest Single-Day Fall in 19 Months

US stock markets witnessed a sharp decline a day after rallying following the midterm election results, recording their steepest single-day losses in 19 months. A wave of selling on Wall Street dragged the Nasdaq down by 5.52%, marking its biggest daily decline in the past 19 months. The S&P 500 fell 4.36%, while the Dow Jones dropped 3.4%. These major indices had not recorded losses of this magnitude since April last year. Shares of Elon Musk-owned companies, including Tesla and SpaceX, also came under heavy selling pressure.

The markets initially surged on optimism following the election results, but investors soon shifted towards profit-booking. Technology, artificial intelligence and semiconductor stocks witnessed significant losses, with Advanced Micro Devices, Micron Technology and Nvidia among the major decliners. Concerns over stretched valuations in the AI and technology sectors further intensified the sell-off. Meanwhile, although Democrats gaining control of both chambers of Congress initially boosted investor sentiment, concerns emerged over their opposition to the rapid expansion of AI data centres. Several Democratic lawmakers have raised environmental concerns and warned about increased electricity consumption. Investors fear that the latest political developments could lead to stricter regulations on new data centre projects, adding further pressure on technology stocks.