Tech stocks tumbled on Wall Street on Thursday on concerns over the future of AI data centre projects following the US midterm elections, wiping out gains from a post-election rally the day before.

A recovery in oil prices also dampened sentiment in equities trading.

The tech-heavy Nasdaq Composite fell more than five per cent in late morning trading in New York before paring losses, with chipmakers bearing the brunt of the sell-off.

Industry giant Nvidia fell more than six per cent, while its competitor AMD dropped 12pc and memory chip maker Micron lost 11pc.

The three companies supply the processors and memory that power AI data centres, and the massive buildout of those facilities by tech giants has been a key driver of their revenue growth in recent years.

Data centres have faced broad opposition from US voters regardless of political affiliation, and many midterm winners have pledged to put the brakes on such projects, for example by imposing moratoriums on new buildouts.

“Tech stocks have gone into freefall, as investors focus on what the new guys in Congress will do to a sector so favoured by the current president and his coterie,” said Chris Beauchamp, chief market analyst at online trading and investing platform IG.

He noted that AI stocks had driven the rally this year and that markets hate uncertainty.

“If this goes south, this market action turns from rotation to general panic,” Beauchamp said.

The Philadelphia Semiconductor Index, which includes the global heavyweights in the AI-related industry, fell more than eight per cent.

Oil prices rebound

Oil prices recovered after plunging as much as 10pc on Wednesday on hopes of progress towards ending the US-Iran war in case of increased Democratic pressure for a diplomatic solution.

“A release valve has been unscrewed following the Democratic success of the midterms, with pent-up concerns about an escalation of the war in the Middle East evaporating,” said Susannah Streeter, chief investment strategist at Wealth Club.

European stocks initially rose on relief following the US midterm election results, with Frankfurt’s DAX index hitting a record high and London coming close to a new all-time peak.

But Frankfurt and London ended the day in the red.

Tech-heavy Asian stock markets slid overall, with Seoul, the poster child of the AI-led surge in the first half of 2026, shedding more than five per cent.

In Britain, the pound was little changed after the Bank of England raised its benchmark interest rate, as expected, for the first time in more than three years as inflation remains elevated.

Away from AI and Trump, shares in Air France-KLM climbed nearly 13pc after the carrier surprised investors with higher operating profit in the third quarter despite a soaring jet fuel bill.

Rheinmetall plunged more than 15pc as the German defence giant cut its earnings outlook for a second time in several months after Berlin pulled the plug on a major warship contract.