Nasdaq plunges 5.5% in Wall Street's worst day in 18 months

Billions of dollars have been wiped off the value of major U.S. tech companies as investors grow nervous about the future of the AI boom.

Wall Street suffered its biggest daily fall since April 2025, with the tech-heavy Nasdaq dropping 5.5%.

The sell-off followed big wins for Democrats in the U.S. midterm elections, raising fears that new data centre projects could face tougher rules.

The fallout has also hit Australia’s sharemarket, with potential flow-on effects.

Here’s what you need to know.

What happened

Wall Street had a sharp sell-off overnight, with investors pulling back from some of the world's biggest companies.

The Nasdaq, which is heavily weighted towards technology companies, fell 5.52%, its biggest daily drop since April 2025.

The broader S&P 500 dropped 4.36%, while the Dow Jones fell 3.44%.

The falls wiped billions of dollars off the value of major U.S. companies, with tech stocks bearing the brunt.

Elections

The sell-off followed big wins for Democrats in the U.S. midterm elections.

Several Democrats campaigned for tougher rules on new data centres, with some calling for construction to be paused.

Because data centres underpin the AI boom, investors are worried tighter rules could slow construction and hurt the companies building them.

Nasdaq

The Nasdaq includes many of the world’s biggest tech companies, including Apple, Microsoft and Amazon.

Because it is heavily weighted towards tech, its performance is often used as a gauge of investor confidence in the sector and the AI boom.

The index had already been falling before the election, as investors questioned whether the huge sums being spent on AI would pay off.

Overnight’s drop pushed the Nasdaq into a “correction”, meaning it has fallen more than 10% from its recent peak.

Australia

Many Australians have money invested in U.S. shares through their super or personal investments, meaning a prolonged downturn could affect their returns.

But the ASX is less reliant on tech, with banks, miners and energy companies making up a large share of the market.

The ASX 200 opened 1.14% lower this morning, with mining stocks leading the falls.

The impact on super will depend on how much each fund has invested in international shares.