The post-election rally in U.S. markets quickly faded as AI-related stocks experienced heavy selling pressure. Cryptocurrencies also declined, but showed greater resilience than equities despite more than $1 billion in market-wide liquidations.
U.S. stocks suffered their steepest daily losses since President Donald Trump unveiled his Liberation Day tariffs in April 2025.
The Nasdaq plunged 5.5%, while the S&P 500 fell 4.3% and the Dow Jones Industrial Average (DJIA) dropped 3.4%.
The continued unwinding of the AI trade dragged major indexes lower. The Nasdaq 100, which has a heavier concentration of technology companies than the broader Nasdaq, tumbled 6.4%. This marked its worst single-session performance since the COVID-19 market turmoil in March 2020.
The Philadelphia Semiconductor Index also came under significant pressure, sliding 12% on Thursday. It recorded its largest one-day decline since March 2020.
Bitcoin dropped 5.2% over the previous 24 hours, falling below $76,000. Ether (ETH) declined 7.5% to $2,241.47, while XRP and Solana each recorded losses of approximately 5.5%.
Gold, meanwhile, moved higher as investors shifted away from riskier assets. Despite pulling back from its earlier high, the precious metal remained up 0.6%, trading near $4,094 per ounce.
The market sell-off came as investors evaluated the potential economic and policy implications of Tuesday’s U.S. midterm elections, which handed Democrats control of both chambers of Congress. Growing political opposition could slow the approval and development of data centers, potentially affecting the AI infrastructure boom that has emerged as an important source of demand for Bitcoin miners.
“Fresh selling pressure is returning as investors begin to consider what slower data center development could mean for markets,” said Joshua Lim, global co-head of markets at institutional crypto brokerage FalconX.
According to Lim, Wednesday’s recovery following the election was largely driven by traders unwinding short positions ahead of an outcome that financial markets had mostly priced in.
Carlos Guzman, vice president of research at digital asset trading firm GSR, said concerns over whether substantial AI infrastructure investments would deliver adequate returns were already creating uncertainty across markets. The midterm election results have added another layer of concern, he noted.
Guzman explained that investors are increasingly worried that political resistance could slow data center development and delay the broader expansion of AI infrastructure. This has added to questions about whether the sector can generate sufficient returns on the enormous capital being committed to it.
He also highlighted disappointing semiconductor earnings as another factor behind the broader market weakness.
Crypto Market Holds Up Better Despite More Than $1 Billion in Liquidations
Leading cryptocurrencies suffered notable losses, although their declines remained relatively limited compared with the steep sell-off in several AI-related stocks.
Bitcoin lost around 5.5% over the past 24 hours, erasing much of Wednesday’s recovery and returning toward the price range it occupied before the post-election rally.
The sudden reversal triggered widespread liquidations across crypto derivatives markets as leveraged traders betting on further price increases were forced to close their positions.
According to CoinGlass data, more than $1 billion in cryptocurrency derivatives positions were liquidated over the 24-hour period. Long positions accounted for the majority of the forced closures, making this the largest liquidation event since at least October 28–29, when Bitcoin plunged from nearly $82,000 to approximately $76,000.
Guzman said Wednesday’s market rebound was partly fueled by improved geopolitical sentiment following the midterm election results. However, the mood changed on Thursday as investors reduced their exposure to risk assets, while leveraged trading amplified the downward move.
Jasper De Maere of crypto market maker Wintermute cautioned against interpreting a single session of market weakness as evidence of a broader shift in market direction.
He pointed out that digital assets performed relatively better than AI-focused equities during the sell-off. Continued cryptocurrency adoption also provides support for a more positive long-term outlook, he added.
Although De Maere acknowledged that the immediate market direction remains difficult to predict, he maintained a constructive view of the medium-term outlook. With correlations across asset classes remaining elevated, he suggested that investors monitor the market for potential buying opportunities as prices undergo a correction.
