Voters turn against data centres and AI stocks fall into correction
The midterm elections gave Democrats both chambers of Congress, and local ballot measures restricted data centres in at least 38 jurisdictions. Investors first bought the largest technology companies, then on Thursday sold the whole AI trade, with the S&P 500 down 4.4% and chip stocks down 12%.
Source published · In the Weekly Review of 8 November 2026
Filed under Markets, AI policy, AI industry
Data centres were on the ballot across the US on 3 November. The Washington Post counted at least 38 jurisdictions that rejected or restricted them, and Engadget, citing the tracker Data Centers on the Ballot, reported 45 measures in 10 states. Democrats won control of the House and the Senate, and candidates of both parties had campaigned against new construction.
Markets read the result in two steps. On Wednesday investors bet that limits on new building would raise the value of existing capacity: Microsoft rose 6.7% and the Dow had its best post-midterm day in 44 years. On Thursday the bet turned into a rout. The S&P 500 fell 4.4%, its worst day since April 2025, the PHLX Semiconductor Index lost 12%, its worst day since March 2020, and Nvidia fell 9%. Goldman Sachs estimated that about 45% of planned US data centre capacity faces possible restrictions after the governor races, according to Yahoo Finance.
Friday brought a partial recovery, with the semiconductor index up 4% in early trading and the Nasdaq up 1.09% at the close. Yardeni Research called the political backlash a constraint on AI investment rather than a roadblock, and pointed to Texas, where the governor-elect said permitted projects could be finished.