Nasdaq has worst day in 18 months as AI regulation fears follow midterms

The Nasdaq composite had its worst day in 18 months on Thursday, slumping 5.5% as investors reacted to signs that the artificial intelligence industry could face tougher regulation after US midterm election results.

Wall Street sustained widespread losses. By the end of trading, more than $2tn had been shaved off the Nasdaq’s value, according to the Guardian. The tech-heavy index also tumbled into correction territory, more than 10% below its recent record high.

The Guardian described the session as the index’s biggest one-day fall since April 2025, when Donald Trump announced his “liberation day” tariffs on US trading partners. Thursday’s decline put a fresh policy shock alongside that earlier market break.

The paper linked the selling to growing signs of a harder regulatory climate for artificial intelligence because of the midterms. It said worries about curbs on AI datacenters rippled across markets. The Guardian’s headline framed the move as following Democrats’ election triumph, and a related report looked at Democrats and state legislatures after the midterms.

Datacenters sit at the center of the current AI build-out because large models depend on concentrated computing power, electricity and sites. Investors have treated that infrastructure spending as a support for technology valuations. Concern that political control could limit where or how those facilities expand is enough, on this reporting, to reprice a broad set of shares before any specific statute is settled.

The scale of Thursday’s move underscored that sensitivity. A 5.5% drop, more than $2tn in lost Nasdaq value and a decline of more than 10% from the recent record arrived together, the Guardian reported, with losses spread across Wall Street. The available account did not list individual company moves or give levels for other major indexes.

The comparison with April 2025 is the main historical marker in the report. Then, markets were reacting to a sudden tariff announcement. On Thursday, the shock was political and still only partly defined: election results that investors read as raising the odds of tighter AI oversight, rather than a finished rulebook.

How far that reading will be borne out is not established in the material at hand. The Guardian pointed to midterm results and to concern about datacenter curbs. It did not, in the text available here, name particular bills, states, agencies or companies. Until those details are clear, the session is best understood as a repricing of regulatory risk.

What happens next depends on whether lawmakers turn that risk into concrete limits. Further detail on AI or datacenter rules could keep pressure on the Nasdaq as investors map policy onto spending plans. If the post-election agenda proves less restrictive than Thursday’s trading assumed, some of the decline could be retraced. The Guardian’s account does not settle which outcome is more likely.

For now, the recorded facts are the day’s market damage: a 5.5% fall, the worst session in 18 months, correction territory relative to the recent record, and more than $2tn gone from the Nasdaq by Thursday’s close, amid fear of a tougher climate for artificial intelligence.