U.S. technology stocks rebounded Friday after a dramatic post-election sell-off wiped trillions of dollars from the market amid fears that Democratic victories could slow the expansion of AI infrastructure and data centers. The tech-heavy Nasdaq composite rose 1.09 percent Friday to close at 24,579.42, while the S&P 500 gained 0.31 percent. The Dow Jones Industrial Average fell 0.46 percent.
The rebound recouped only part of Thursday’s steep losses, when the Nasdaq plunged 5.5 percent, the S&P 500 fell 4.4 percent and the Dow dropped more than 1,800 points, or 3.4 percent. The three major indexes suffered their worst one-day losses since April 2025, while the Nasdaq entered correction territory, meaning it had fallen more than 10 percent from its recent high. Companies closely tied to the AI boom bore the brunt of the selling, with the so-called Magnificent Seven technology companies collectively shedding about $1 trillion in market value during Thursday's rout.
The volatility followed sweeping Democratic victories in the midterm elections and a series of setbacks at the ballot box for data-center development, raising questions about whether the industry's rapid expansion could face new political obstacles. Opposition to data centers emerged as a significant issue during the midterm campaign, fueled by concerns about electricity and water consumption, utility bills, environmental effects and the incentives offered to developers. As Newsweek previously reported, data centers featured in 41 ballot measures across 10 states on Election Day.
In all but one, voters supported some form of restriction or ban on their development. The industry's political setbacks went beyond local ballot measures. An analysis of Newsweek's AI Policy Scorecard found that members of Congress who supported data centers were more likely to have been defeated in the midterms than colleagues who opposed them.
Republicans and Democrats had relatively similar scores across a number of AI policy areas, but differed significantly over data centers, with congressional Republicans averaging a "Lean Booster" rating on data centers and Democrats averaging a "Lean Skeptic" rating. Texas could be particularly consequential. Democratic Governor-elect Gina Hinojosa campaigned on imposing an immediate moratorium on new data-center approvals until protections addressing electricity, water and other concerns are put in place.
The state is one of the country's most important data-center markets. Wells Fargo estimates that 27 percent of planned U.S. data-center gigawatts are in Texas, according to CNBC. Concerns over such potential restrictions weighed heavily on AI-related stocks Thursday.
Extract — continue reading at the source.
