AI fears hit Wall Street hardest since tariffs

Wall Street’s rout now turns on whether AI data-center policy becomes a real constraint on spending. On Thursday the S&P 500 fell 4.4%, its worst session since the April 2025 tariff shock, Gujarat Samachar reported on Nov. 6.

The selling was concentrated where policy could touch planned data centers. Investors fear that Democrats' sweep of the US Congress will bring tighter rules on the AI data-centre boom, and disappointing chipmaker earnings added to the selling, Gujarat Samachar reported. CNN reported through KWWL that shares of chipmakers and the “picks and shovels” of the data center buildout and AI boom sold off as investors weighed Democrats winning races in states like Texas, a hub for planned data centers.

Volatility, not only prices, made the move dangerous. The Nasdaq 100 sank 6.36%, its worst day since March 2020, and the VIX surged roughly 70% to its highest level in seven months, CNN reported through KWWL on Nov. 5. A fall in large technology shares can damage index funds; a jump in volatility also raises the cost of protection for institutions that hedge portfolios after the fact.

The next session is therefore a test of whether the selloff stays tied to policy or cools into ordinary repricing. AD HOC NEWS said the next trading session would be shaped by further developments around AI investment and data-center policy. If the news stays there, the market will keep pricing political permission, power access and planning risk into the AI buildout.

Disappointing chipmaker earnings offer another explanation for the selling. The rout could still be an earnings reset in a crowded trade rather than a lasting response to possible new rules. If so, the damage would be concentrated in companies whose results failed to support AI expectations.

The damage also moved outside New York. Gujarat Samachar reported that amid a global AI stock sell-off, Wall Street saw its worst day in 18 months, Tokyo entered a bear market, and Seoul halted trading. The same outlet said India was the market investors left behind. That split matters because it shows the trade was not a simple flight from risk everywhere; markets with less direct exposure to the AI selloff could separate.

The crypto spillover looked smaller. Coingabbar reported separately that GXRP's tokens equal about 0.1% of circulating supply, so Wall Street exposure exists but remains small. That does not make the token immune to sentiment, but it keeps the reported direct bridge from Wall Street to that market limited.

A household with an index fund would notice the price loss first, while pension funds, insurers and other large hedgers would watch whether protection costs keep rising. The cleanest signal is whether volatility falls as earnings fears are digested, or stays high because the market is still repricing who gets to build the next wave of AI infrastructure.