Wall Street’s post-midterm optimism collapsed Thursday in a broad selloff that erased $3.2 trillion in market value, with the Nasdaq Composite plunging 5.52% to 24,315.00 points, the Dow Jones Industrial Average falling 3.44% to 51,521.28, and the S&P 500 dropping 4.35% to 7,353.80, ANSA reported. The rout was driven by a flight from artificial intelligence-linked stocks after Democrats won the U.S. midterm elections, as investors priced in tighter regulation of the sector.
Democratic Victory Sparks Flight From AI-Linked Stocks
According to ANSA, the Democratic victory triggered a run out of AI-related equities on expectations of stricter rules for the technology, ending the euphoria that followed the election results. Il Sole 24 Ore added that investors are also weighing the prospect of a contentious two years pitting President Trump against a Democrat-majority parliament, which markets view as a source of uncertainty.
Chipmakers and Musk Companies Take the Heaviest Losses
Semiconductor producers Broadcom and Nvidia each fell more than 9%, while software company Oracle dropped 7%, ANSA reported. Tesla slid 10.77% and SpaceX fell 9.5%, both hit after Elon Musk backed Republican candidates, Il Sole 24 Ore noted. Neocloud companies were also down.
European Markets Follow Wall Street Lower
The negative trend on Wall Street weighed on European exchanges from the open. Milan was the worst performer, with the Ftse Mib closing down 1.03%, ANSA reported, while Il Sole 24 Ore put the decline at 1.03% as well. Frankfurt’s Dax fell 0.4%, Amsterdam’s Aex dropped between 0.6% (ANSA) and 0.7% (Il Sole 24 Ore), and London’s Ftse 100 declined between 0.3% and 0.5% depending on the outlet — Il Sole 24 Ore noted the Bank of England raised rates to 4% for the first time in three years. Paris’s Cac rose 0.3% and Madrid’s Ibex gained between 0.4% and 0.8%, the two outlets differing on the size of the gain.
Italian tech stocks bore the brunt in Milan: StMicroelectronics closed down 9.33% and Technoprobe fell 9.28%, with Prysmian down 4.02%, ANSA and Il Sole 24 Ore reported. Defense shares also suffered, with Fincantieri down 4.77%, Avio down 2.83%, and Leonardo down 3.45% despite quarterly results above expectations — Il Sole 24 Ore noted the market questioned why the group did not raise full-year 2026 guidance. Stellantis also lost around 4%. Among banks, Bper fell 2.7% to €13.20 after third-quarter results, and Mediobanca dropped 1.5%.
Gainers included Tenaris, up 3.66% to above €25 after beating estimates, Amplifon up 2.76% on positive results from Danish company GN Hearing, and Finecobank up 2.43% after nine-month results showing double-digit growth across all business areas, Il Sole 24 Ore reported.
Market Moves Reflect Investor Caution
The euro held steady around 1.123 against the dollar, ANSA reported. The spread between 10-year Italian BTPs and German Bunds widened to 109.7 basis points from 105 at the open, with the Treasury yield rising to 4.33%. Cryptocurrencies were weak: Bitcoin fell as much as 5% to around $76,000 and Ethereum dropped 6% to $2,260. Gold edged higher to an intraday high of $4,155 an ounce. In energy, gas rose 1.5% to €89.4 per megawatt-hour after European markets closed, and New York oil gained more than 2%, reclaiming $90 a barrel.
FAQ: Thursday’s Market Rout
Why did stocks sell off after the midterms? ANSA reported that the Democratic victory triggered a flight from AI-linked stocks on expectations of tighter U.S. regulation of artificial intelligence, reversing the post-election rally.
How much value did Wall Street lose? ANSA reported the selloff burned $3.2 trillion in market value, with the Nasdaq down 5.52%, the Dow down 3.44% and the S&P 500 down 4.35%.
Which stocks fell hardest? Broadcom and Nvidia each lost more than 9%, Tesla fell 10.77%, and in Milan StMicroelectronics and Technoprobe each dropped about 9%, according to ANSA and Il Sole 24 Ore.
What happened to Bitcoin and gold? Bitcoin slid as much as 5% to around $76,000 while gold rose to an intraday high of $4,155 an ounce, ANSA reported.
The Bank of England’s decision to lift rates to 4% — its first hike in three years, as Il Sole 24 Ore noted — underscores that Thursday’s selloff came against a backdrop of tightening monetary policy on both sides of the Atlantic.
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