Stocks plunge as midterm results send AI trade into a tailspin

The Nasdaq Composite fell as much as 5.7% Thursday, entering correction territory, as investors weighed whether Democratic midterm gains could slow the data center buildout, with Texas' Democratic gubernatorial victory a key factor given the state's role in AI infrastructure. Nvidia fell 7%, a chipmaker index dropped 10%, and CoreWeave and Nebius plunged roughly 11% and 15%, while the VIX surged 50% to a seven-month high. Yardeni called a slowdown in the "too frenzied and speculative" AI buildout a potential silver lining, while Truist's Lerner said the risk-reward is improving for longer-term investors.