Trump says US took ‘giant step back in history’ after Democrats’ midterm victory

A US midterm election is a national election held halfway through a president’s four-year term. Voters choose members of Congress, and some states also hold other elections. It matters because the result can change which party controls lawmaking, oversight and investigations in Washington, even though the president remains in office.

In this case, Democrats secured majorities in both the House of Representatives and the Senate. That shifted the balance of power and opened the door to challenges against Trump administration policies, closer scrutiny of federal spending and investigations. Democratic candidates also campaigned against some new data-centre projects.

Democrats still cannot pass every policy without limits. Trump retains the presidential veto, which can block congressional legislation. Congress could override that veto only with a two-thirds majority in both chambers. Trump signalled he might use the power by posting a photograph of a red cap marked “VETO,” although he said he did not want to veto everything.

The decline was enormous in headline terms: US stocks lost roughly $3 trillion in market value on Thursday. The S&P 500 fell 3.8%, the Dow Jones Industrial Average dropped 2.9%, or more than 1,500 points, and the Nasdaq declined 5.2%. These figures show that the selling spread across major parts of the market.

Technology and artificial-intelligence-linked shares were hit hardest. The Philadelphia Semiconductor Index fell nearly 10% during trading and briefly dropped as much as 11%. AMD and Micron each lost around 15%, while Nvidia fell almost 9%. Asian markets also weakened, including South Korea’s Kospi, Taiwan’s main index and Japan’s Nikkei.

The article connects the sell-off partly to worries about technology-sector growth, especially data-centre expansion. Investors feared Democratic campaigns for restrictions or pauses could delay permits and weaken the outlook for companies tied to the AI infrastructure boom. Texas was especially important because it held an estimated 27% of planned data-centre capacity.

Markets initially welcomed the Democratic sweep. On Wednesday, the Dow Jones Industrial Average jumped 1,569 points, or 3%, its strongest post-midterm performance in 44 years. The S&P 500 also gained 1.6%. Investors appeared to expect a divided government and more predictable policymaking.

That optimism vanished the following day. US stocks lost roughly $3 trillion in market value on Thursday. The Nasdaq dropped 5.2%, the S&P 500 fell 3.8%, and the Dow declined 2.9%, or more than 1,500 points. Technology and artificial-intelligence-linked shares suffered especially heavy losses, including a nearly 10% intraday fall in the Philadelphia Semiconductor Index.

Trump blamed the reversal on investors learning that Democrats had performed well, while also referring to his administration’s position on Iran’s nuclear programme. The article gives another major concern: Democratic campaigns to restrict or pause new data centres. Those proposals raised fears about permitting delays and the future of AI infrastructure companies.

Technology and AI stocks fell sharply because investors were reassessing the sector’s future growth. The article focuses especially on data centres, which support the expansion of AI services but demand substantial electricity and local infrastructure. Democratic candidates campaigned on restricting or pausing new projects because of those demands.

The political risk became concrete in several states. Gina Hinojosa campaigned for an immediate moratorium on new data centres in Texas. Amy Acton and Keisha Lance Bottoms also included development restrictions in their campaigns. Texas mattered particularly to investors because an estimated 27% of planned data-centre capacity was located there. Governor Greg Abbott had already paused new permits pending an electricity-grid audit.

Investors worried that new political control could bring permitting delays or fewer projects. That could affect companies supplying chips and other infrastructure for AI expansion. The Philadelphia Semiconductor Index fell nearly 10% intraday, while AMD and Micron each lost around 15%. These moves show how expectations about future projects can quickly affect share prices.

An election can move stocks because investors value companies partly by looking ahead. They reassess expected profits, costs, regulations and political risks when power changes hands. This can happen immediately, even if factories, employees and current earnings remain unchanged. The market is reacting to revised expectations about the future.

The article offers a clear example. Democratic candidates campaigned to restrict or pause new data centres because of their electricity and infrastructure demands. Investors feared those policies could delay permits or limit expansion. Companies tied to chips, servers and AI infrastructure could then face weaker growth prospects, helping explain the steep falls in AMD, Micron and semiconductor shares.

The election also changed expectations about government policymaking. Investors initially welcomed the prospect of divided government and more predictable decisions, sending the Dow up 3% and the S&P 500 up 1.6%. The next day, concerns about technology policy and other political developments dominated. Prices therefore moved before any company’s operations immediately changed.

Democrats gained majorities in both the House of Representatives and the Senate. That gave them greater control over congressional activity and the ability to challenge administration policies. The article specifically highlights scrutiny of federal spending and investigations into the Trump administration. Their victory therefore changed Washington’s balance of power, even though Trump remained president.

Congressional control also affects the policy environment around issues such as data centres. Democratic candidates campaigned for restrictions or pauses on new projects, and their stronger position could make such proposals more politically significant. The election result also gave Democrats a stronger platform for examining government decisions and spending.

Trump retained one of the presidency’s strongest powers: the veto. He can block legislation passed by Congress unless lawmakers secure a two-thirds majority in both chambers to override it. He posted a red cap marked “VETO” after the result, but also said he did not want to spend two years vetoing everything.

When reports say the stock market lost $3 trillion in one day, they mean the estimated total value of listed companies fell by that amount. This is a market-value calculation, not a record of equivalent cash leaving every company. The figure comes from multiplying share prices by the number of shares available, then comparing the total before and after trading.

For example, if investors collectively mark down shares across major indexes, the companies’ combined market capitalisation falls. A sharp decline in technology stocks can make the loss especially large because those companies represent substantial market values. In the article, the Nasdaq dropped 5.2%, while the S&P 500 and Dow also fell significantly.

The value can change without factories closing or earnings disappearing that day. Investors were reacting to election results, possible policy changes and concerns about data-centre expansion. The $3 trillion therefore describes a change in financial valuation. It does not mean that exactly $3 trillion in physical assets or corporate cash was destroyed.