Why did US stocks crash? Trump blames Democrats as AI regulation fears rattle markets

US President Donald Trump blamed the Democratic Party's victory in the midterm elections for Thursday's sharp stock market selloff, even as concerns over potential regulatory curbs on artificial intelligence investments weighed heavily on technology shares, AFP reported.

In a post on his Truth Social platform after US markets closed, Trump attributed the market decline to the Democrats' strong performance in Tuesday's elections, suggesting that investors had reacted negatively to the political outcome.

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The selloff came amid growing concerns that Democrats could push for tighter restrictions on the artificial intelligence industry, threatening the massive investment boom in AI infrastructure and data centres.

Analysts attributed Thursday's sharp decline in equities to fears that Democratic election victories could lead to greater scrutiny of AI-related investments and data centre projects.

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The technology-heavy Nasdaq Composite suffered its worst percentage decline in a single session since April 2025, reflecting the extent of investor concerns surrounding the sector.

Data centre developments have increasingly faced opposition from voters across the political spectrum in the United States. Several candidates who won in the midterm elections have pledged to slow down or restrict such projects, adding to uncertainty over the future of AI infrastructure expansion.

The political backlash comes at a time when technology companies are committing enormous sums to build data centres and expand computing capacity to support the rapid development of artificial intelligence.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)