Major decline in tech stocks in US following mid-term elections

The enthusiasm seen in the market following the completion of mid-term elections in the US has evaporated, resulting in a significant decline in Wall Street tech stocks. During Thursday morning trading in New York, the tech-heavy Nasdaq Composite Index recorded a decline of more than 5 percent. This decline is primarily attributed to concerns regarding the future of AI data center projects, which has completely wiped out the gains observed on the previous day.

Chip manufacturers suffered the heaviest losses in this decline. Industry giant Nvidia's shares fell by more than 6 percent, while its rival AMD's shares recorded a 12 percent decline. Memory chip maker Micron also fell by approximately 11 percent. These three companies supply the processors and memory essential for running AI data centers. In recent years, the large-scale construction of these facilities by tech giants had led to a significant increase in the revenue of these companies.

The construction of data centers is facing widespread opposition from American voters, regardless of political affiliation. Many candidates who won in the mid-term elections have promised to halt such projects or impose a moratorium on new constructions. According to an NDTV report, Chris Beachamp, Chief Market Analyst of the online trading platform IG, stated that investors are now focusing on what the new members of Congress will do regarding this sector, which has received strong support from the current President and his supporters. He further added that AI stocks had driven the market rally this year and the market does not like uncertainty. If the situation worsens, this market movement could turn into general panic.

Additionally, corrections in oil prices also weakened equity trading sentiment. The Philadelphia Semiconductor Index, which comprises global AI-related industry giants, also saw a decline of more than 8 percent.