U.S. President Donald Trump blamed the midterm election results for a roughly $3 trillion loss in U.S. stock market value on November 5, after a sharp sell-off in stocks and cryptocurrencies erased the previous session's gains.

Midterm elections fall halfway through a president's four-year term and determine the full membership of the U.S. House of Representatives and roughly one-third of the Senate.

In a November 8 post shared by The Kobeissi Letter, a financial markets commentary service, Trump described the election outcome as a “giant step back in history.” The president linked the market decline to Democratic victories, although concerns over artificial intelligence investments also contributed to the selling.

The S&P 500, a benchmark index of large U.S. companies, lost approximately $3 trillion in market value—the combined worth of its member companies—during Thursday's session, while major technology companies recorded heavy losses. The Nasdaq Composite entered correction territory—commonly defined as a decline of at least 10% from a recent peak, with declines of 20% or more regarded as bear markets—and investors reassessed the outlook for AI infrastructure spending.

Trump Blames Democrats for the Loss

Trump's remarks followed his November 5 statement on Truth Social, the social media platform he founded, in which he criticized the market's reaction to the elections. He argued that Democratic victories had reversed the progress made during his administration and had affected Americans' retirement savings.

“The Stock Market suffered one of the Worst Days in History based on the results of the Election,” Trump wrote. He blamed Democrats for the decline while maintaining that the market could recover.

The sell-off, however, followed a rally on November 4, when investors had initially welcomed the election results. The S&P 500 gained 1.58% that day, while the Dow Jones Industrial Average advanced approximately 3% during the same session.

BREAKING: President Trump says the US took a “giant step back in history” after the Midterm election results and comments on the $3 trillion loss in the stock market on November 5th. pic.twitter.com/lHuCERlTki

— The Kobeissi Letter (@KobeissiLetter) November 8, 2026

The reversal came as investors assessed how the new congressional balance could affect corporate spending and technology regulation. Democrats secured control of Congress, while several gubernatorial victories raised questions about future data center approvals.

Some newly elected governors have proposed restrictions on large AI projects, particularly those requiring substantial electricity supplies—data centers used for AI workloads consume significant amounts of power, making local availability a central approval consideration. The proposals have raised concerns over planned data center expansion across several states. Such restrictions have not automatically become law, however, and governors face different approval requirements across states. Markets have also reacted to company valuations, technology spending, and expectations for future earnings.

Nasdaq Drops 5.52% as AI Stocks Lead Wall Street Decline

The Nasdaq Composite dropped 5.52% on November 5, closing at 24,315 in its steepest daily decline in 19 months. The S&P 500 fell 4.36% to 7,353.73, while the Dow Jones Industrial Average declined 3.44% to 51,523.06.

Technology companies recorded some of the largest losses. The Nasdaq Composite is weighted heavily toward technology stocks, so declines of this size among chipmakers feed directly into the index's overall performance. Nvidia shares fell approximately 9.3% during Thursday's trading, while Advanced Micro Devices and Micron Technology each dropped around 17%. The Philadelphia Semiconductor Index, which tracks U.S.-listed chipmakers, declined approximately 12%.

The decline reflected renewed concerns about AI infrastructure spending and the financial returns expected from major technology investments. Investors scrutinized the funding required to construct data centers and secure electricity supplies, and the sell-off spread across companies involved in chips, cloud computing, and data center development. Nvidia, Advanced Micro Devices, and Micron are major suppliers of chips used in AI data centers.

Several semiconductor stocks, however, recovered during Friday's trading as buyers returned after the previous session's declines.

The broader downturn extended across the market, with all 11 S&P 500 sectors—the index's complete set of industry groups—closing lower on Thursday. The losses followed growing concern about future regulation and the pace of corporate investment.

Meanwhile, the incoming Democratic majority is preparing greater congressional oversight of Trump's business interests and technology companies. The election results have prompted plans for investigations into Trump-linked crypto businesses, although the new Congress will not convene until January. Incoming congressional majorities control committee chairmanships and subpoena authority.