The main reason for the current decline in tech stocks was the Democrats’ victory in the U.S. midterm elections: the market began to rethink the logic behind the AI-related deals that had fueled its growth over the past three years. Voters are strongly opposed to building data centers in their communities, and the Democrats, who are now expected to control both chambers of Congress, will hold hearings and ask questions about the development of the AI industry.

At first, the sell-off was limited to funds flowing out of the semiconductor sector, but then it grew into a large-scale crash. By the close of trading on November 5, all 11 sectors of the S&P 500 were down. Information technology was the biggest decliner, losing as much as 7% during the day. The Nasdaq 100 technology index fell 6.36%, shedding more than $2 trillion in market capitalization; the Philadelphia Stock Exchange Semiconductor Index dropped 12.25%, its worst performance.