Wall Street's AI trade just had one of its worst weeks in years. Politics and inflation hit it at the same time. The Nasdaq Composite posted its deepest one-day drop since April 2025 last week, after Democrats swept the midterm elections and investors began weighing tougher scrutiny of AI and limits on data center construction. The Cboe Volatility Index climbed to a seven-month high the same day. Why the AI Selloff Hit Chip and Data Center Stocks So Hard Stocks first cheered the election. They closed sharply higher the day after the vote because the result cleared up political uncertainty. Then chipmakers and data center operators fell, even as the biggest, cash-rich AI spenders rose.
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