Trump Doubles Down on Data Centers After Post-Midterms Tech Stock Rout - Newsweek

U.S. technology stocks rebounded Friday after a dramatic post-election sell-off wiped trillions of dollars from the market amid fears that Democratic victories could slow the expansion of AI infrastructure and data centers.

The tech-heavy Nasdaq composite rose 1.09 percent Friday to close at 24,579.42, while the S&P 500 gained 0.31 percent. The Dow Jones Industrial Average fell 0.46 percent.

The rebound recouped only part of Thursday’s steep losses, when the Nasdaq plunged 5.5 percent, the S&P 500 fell 4.4 percent and the Dow dropped more than 1,800 points, or 3.4 percent. The three major indexes suffered their worst one-day losses since April 2025, while the Nasdaq entered correction territory, meaning it had fallen more than 10 percent from its recent high.

Companies closely tied to the AI boom bore the brunt of the selling, with the so-called Magnificent Seven technology companies collectively shedding about $1 trillion in market value during Thursday's rout.

The volatility followed sweeping Democratic victories in the midterm elections and a series of setbacks at the ballot box for data-center development, raising questions about whether the industry's rapid expansion could face new political obstacles.

Opposition to data centers emerged as a significant issue during the midterm campaign, fueled by concerns about electricity and water consumption, utility bills, environmental effects and the incentives offered to developers.

As Newsweek previously reported, data centers featured in 41 ballot measures across 10 states on Election Day. In all but one, voters supported some form of restriction or ban on their development.

The industry's political setbacks went beyond local ballot measures.

An analysis of Newsweek's AI Policy Scorecard found that members of Congress who supported data centers were more likely to have been defeated in the midterms than colleagues who opposed them. Republicans and Democrats had relatively similar scores across a number of AI policy areas, but differed significantly over data centers, with congressional Republicans averaging a "Lean Booster" rating on data centers and Democrats averaging a "Lean Skeptic" rating.

Texas could be particularly consequential.

Democratic Governor-elect Gina Hinojosa campaigned on imposing an immediate moratorium on new data-center approvals until protections addressing electricity, water and other concerns are put in place.

The state is one of the country's most important data-center markets. Wells Fargo estimates that 27 percent of planned U.S. data-center gigawatts are in Texas, according to CNBC.

Concerns over such potential restrictions weighed heavily on AI-related stocks Thursday. All 11 sectors of the S&P 500 finished lower, but companies associated with the AI infrastructure build-out led the declines.

President Donald Trump, who has made expanding America's AI infrastructure a major priority of his administration, directly blamed the election results for Thursday's decline.

"The Stock Market crashed today because the Dumocrats had a big Tuesday," Trump wrote on Truth Social Thursday.

In an earlier post, he similarly said the stock market had suffered "one of the Worst Days in History based on the results of the Election," telling Americans that their 401(k)s had consequently fallen.

But Trump showed no sign Friday of retreating from his push to accelerate AI development.

"As President, I am 100% in favor of Super Intelligence (SI), and will work with the many States in the U.S. that want to become RICH by having them," he wrote on Truth Social, using his preferred term for AI. "They are GOLD, and only foolish leadership will say 'NO' to the riches they bring!"

The comments underline the political divide now facing the industry: Trump remains an outspoken advocate for rapid AI expansion as voters in numerous communities backed restrictions on data centers and some newly elected Democrats have called for tighter controls on their development.

Dan Ives, partner and senior managing director at Yorkville Ives & Co., told Newsweek in an email Friday that investors had dramatically overreacted to fears about what the Democratic victories could mean for the AI boom.

"The massive tech sell-off yesterday on fears around the Blue Wave delaying and disrupting the AI data center build out in the US was at a magnitude actually treating tech stocks and especially semis like this mid-term Democratic win will actually end the AI buildout in the US….and it will not!" Ives wrote.

Ives argued that Thursday's rout presented a buying opportunity rather than a fundamental break in the AI trade.

“We would characterize this sell-off level and magnitude with the tech sell-offs we saw in March 2020 during Covid and the April 2025 Liberation Day sell-off…which were golden buying opportunities to own the tech winners and this one is the same,” Ives wrote.

Friday's trading offered at least some support for that bullish view as investors moved back into beaten-down AI stocks.

Nvidia gained about 3 percent Friday, following a roughly 9 percent drop Thursday. Micron Technology, which had plunged 17 percent Thursday, rose 5 percent Friday, while AMD jumped about 11 percent after tumbling more than 17 percent the previous day. Tesla, Meta Platforms and Alphabet also rebounded after falling Thursday.

The Data Center Coalition, which represents the U.S. data-center industry, emphasized its commitment to continued growth following the elections.

"Affordability, jobs, and the economy are priorities for Americans across the country," Dan Diorio, the coalition's executive vice president of state policy and government affairs, told Newsweek Friday.

"Data centers can play a crucial role in advancing affordability for Americans through job creation, local tax revenue, and bringing investment and opportunity to local communities."

Diorio said the industry remained committed to expanding U.S. digital infrastructure but emphasized engagement with communities, reflecting some of the concerns that became politically potent during the midterms.

"We will continue to engage with residents and local leaders to understand community priorities and ensure that the growth of digital infrastructure delivers clear benefits that communities across the nation are seeking," he said.

The coalition, Diorio added, would work with federal, state and local policymakers "to earn trust, support responsible data center growth, and help build a stronger economic future for every American."

The statement did not directly address whether any data-center companies are reconsidering or delaying projects following the election or the market sell-off.

The political vulnerability of the data-center boom was apparent even before Tuesday. Last month, Trump adjusted his approach as community opposition increased, suggesting that companies seeking local support could pay communities or residents a "dividend."

"MAKE DEALS, and get them built!!!" Trump wrote. He had previously taken a harder line toward resistant communities, writing in August that areas rejecting data centers risked becoming "backwards and poor."

That broader backlash translated into concrete political results Tuesday, including restrictions approved by voters around the country and victories by candidates who campaigned against aspects of data-center expansion.

The market turmoil also came as the White House postponed a scheduled Friday meeting of the President's Council of Advisors on Science and Technology.

The outside advisory group includes Nvidia CEO Jensen Huang, Meta CEO Mark Zuckerberg, AMD CEO Lisa Su, Oracle Chief Technology Officer Larry Ellison and venture capitalist Marc Andreessen.

The meeting was expected to advise Trump's new AI task force.

A White House official told Newsweek Friday that the meeting was postponed because of a scheduling conflict.

The broader question facing investors is whether the political backlash demonstrated by Tuesday's results will translate into substantially slower AI infrastructure development, or whether Thursday's rout represented an overreaction to obstacles the technology industry can ultimately navigate.

Friday's partial recovery suggested some investors were willing to bet on the latter, but the major indexes remained well below where they stood before Thursday's rout.

Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here. Contact Newsweek editors on this story: Edward T. Cummins