U.S. stocks and crypto assets sold off sharply on Nov. 5 as traders reassessed the policy outlook following Democratic victories in both chambers of Congress, with semiconductor and AI-linked companies suffering the deepest losses.
Near the closing bell, the Dow Jones Industrial Average was down more than 1,600 points, or roughly 3%. The S&P 500 had fallen nearly 4%, while the Nasdaq slid more than 5%. The Philadelphia Semiconductor Index dropped close to 10%, reflecting a rapid reversal from the post-election rally seen a day earlier.
The market decline centered on companies whose valuations depend heavily on continued spending for artificial intelligence infrastructure, including chips, data centers, cloud capacity and power equipment. AMD fell 17.55%, Micron lost 16.8%, Marvell Technology dropped 16.3%, Intel declined 11%, and U.S.-listed shares of Taiwan Semiconductor Manufacturing fell about 10%, according to market data cited by msx.com. SanDisk sank about 22%.
Nvidia, the largest company in the AI chip trade, traded down roughly 6% to 9% during the session. Yahoo Finance data showed that the company's market value had declined by nearly $1.4 trillion from its October record high. At one point on Nov. 5, Nvidia was on course for its largest intraday decline since April 2025.
Election result shifts focus to AI policy
The selling followed preliminary U.S. midterm election results showing Democrats taking control of the Senate and House of Representatives, as well as gaining several state-level offices and legislatures.
Democrats were reported to hold 54 Senate seats against 44 for Republicans, with Alaska and Mississippi still uncalled. Before the election, Republicans held 53 Senate seats. Reported Democratic Senate gains included Texas, North Carolina, Iowa, South Carolina, Ohio and Maine.
In the House, an afternoon tally on Nov. 4 put Democrats at 251 seats and Republicans at 155, clearing the 218 seats needed for a majority. The party also flipped five governorships, including Texas, where the Democratic candidate defeated three-term Republican Gov. Greg Abbott. Preliminary results indicated as many as 12 state legislative chambers changed hands, including the Pennsylvania Senate, which had been controlled by Republicans since 1994. Both chambers in Arizona were also projected to flip.
Markets initially rose after President Donald Trump said he accepted the election outcome. By the next session, attention had shifted from the prospect of a divided federal government to questions over whether a Democratic Congress could seek tougher limits on advanced AI development and the infrastructure supporting it.
TipRanks listed concerns over AI policy, weakness in chip stocks and uncertainty around interest rates among the factors cited for the Nov. 5 decline. The reaction suggested that traders were placing greater weight on the political risks facing companies committed to multibillion-dollar data-center expansion plans.
A social-media post amplifies regulatory concerns
The policy debate gained momentum after Arizona Democratic Rep. Yassamin Ansari wrote on Nov. 4 that the party's first-day agenda should include pausing advanced AI development, regulating parts of the industry she described as out of control, and banning artificial superintelligence.
Elon Musk reposted Ansari's message early the following day with the comment, "It is a Brave New World." Musk has previously argued that space-based data centers could become attractive, an idea tied to the rising demand for computing capacity and electricity generated by AI systems.
Ansari's post did not represent an announced Democratic Party platform or legislation. A related proposal was introduced in September by Sen. Bernie Sanders and Rep. Greg Casar. Their measure called for a permanent ban on artificial superintelligence and a pause on advanced AI development, but it had not become law.
Even without immediate legislation, the election result places AI policy at the center of market calculations. Large chipmakers and data-center operators have been priced around expectations of sustained demand for high-performance computing. A slower approval process, new safety requirements or restrictions on certain AI capabilities could alter the pace of those projects and the revenue assumptions behind them.
Data-center companies absorb steeper losses
Data-center operators, infrastructure suppliers and newer cloud providers fell more sharply than the largest established technology platforms. CoreWeave dropped about 11%, Nebius fell roughly 14% to 15%, IREN lost about 15%, and power-and-cooling equipment provider Vertiv declined about 14%.
Oracle fell about 7% after recently pricing roughly $20 billion in equity and debt financing, a reminder of the capital required to build infrastructure for AI workloads. The company has positioned itself as a major provider of cloud capacity for AI customers, but the scale of financing has also focused attention on debt, construction costs and the need for continued customer demand.
Amazon declined about 3% intraday, while other mega-cap technology companies posted more limited losses than data-center-focused firms. The disparity reflected a market preference for businesses with broader revenue bases over companies more directly dependent on aggressive expansion in AI computing capacity.
Tesla fell about 11%, while SpaceX declined about 9%. CNBC linked part of the pressure on Musk-associated companies to reports that he spent about $474 million on Republican-linked political groups during the election cycle.
Crypto stocks fall faster than major tokens
Crypto-related equities also declined sharply, extending the risk-off move beyond technology stocks. Coinbase fell about 10%, Circle dropped between 8% and 12%, Strategy lost roughly 10%, and publicly listed Bitcoin mining companies fell around 15% to 20%.
Bitcoin briefly traded below $76,000, touching a roughly three-month low before recovering above that threshold. During one volatile stretch, Bitcoin moved from $78,767 to $75,986 within an hour after trading above $80,000 earlier in the day.
Ether fell about 7% to around $2,248. XRP and Solana declined between 4% and 7%, while total cryptocurrency market capitalization dropped about 5% to roughly $2.6 trillion.
CoinGlass recorded about $1.12 billion in cryptocurrency liquidations over 24 hours, including approximately $990 million in long-position liquidations involving more than 210,000 traders. The figures show how rapidly leverage amplified the decline after prices broke below closely watched levels.
Spot Bitcoin exchange-traded funds recorded about $148 million in net inflows on Nov. 5 despite the market drop, indicating that some demand remained in regulated fund products even as leveraged traders were forced out of positions.
Glassnode placed the rolling 20-day correlation between digital assets and the wider equity market at 0.63, underscoring how closely crypto has traded with risk assets during periods of concentrated selling. The Nov. 5 session reinforced that connection: a reassessment of AI policy, spending and interest-rate risks rapidly moved from semiconductor shares into high-beta crypto equities and major tokens.
In bond markets, the 10-year Treasury yield stood near 4.9% after falling to 4.894% on Nov. 4 from 4.952% in the previous session. The U.S. dollar index traded around 101.4, near a one-month low. Market pricing implied a roughly 67% probability of a Federal Reserve rate increase in December, leaving Friday's nonfarm payrolls report as the next major test for assets already reacting to a sudden change in Washington's political balance.
Worried about post-election volatility? Learn how political shifts can move BTC, ETH, and more in this detailed market outlook.
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