The Dow Jones faces a sharp selloff as election results trigger a backlash against data-centre expansion, overshadowing robust US economic data and keeping the index near its lowest level since mid-October.
After Tuesday's election result read as a vote against the data-centre buildout, the Dow is on track Thursday for its worst session since April 2025, trading just above 51,500 with 29 of 30 members lower. Price weighting amplifies the damage: Goldman at ~$870 is a tenth of the index and Caterpillar's data-centre-tied power business makes it the second-largest drag. Strong jobs and productivity data were ignored, and the short bias holds while the 50-day EMA near 52,150 caps.
Investors are treating Tuesday's result as a vote against the data-centre buildout. Voters backed restrictions in nearly all of the 40-plus local data-centre measures, and Democrats won in Texas and Ohio where the buildout is concentrated.
Resistance sits at the 50-day EMA near 52,150, then the late-October high near 52,900. Support is Thursday's low just below 51,500, then the October 14 low near 51,400 and the early-October lows near 51,000.
The VIX touched 28 on Thursday, its highest level since March 31, as the Dow headed for its worst session since April 2025 on the data-centre backlash. Uncertainty extends beyond the session: Friday's payrolls decide whether the December 9 Fed meeting brings a rate hike or a slower-economy story, both reasons to stay hedged.
The Cboe Volatility Index touched 28, its highest level since March 31.
The Nasdaq Composite is more than 10% below its October record after the election was read as a referendum on the data-centre buildout, and chip stocks as a group are on track for their worst session since March 2020. The selling started in the chipmakers, the heart of the index, and UBS estimates pauses could put about 30% of capacity planned for 2028 at risk.
The Nasdaq Composite is more than 10% below its October record after Thursday's session.
Nvidia fell about 9% on Thursday as chip stocks had their worst session since March 2020, with the election result read as a vote against the data-centre buildout that drives demand for its chips. At about $180 it is 2% of the price-weighted Dow, so the drop accounted for about 6% of the index's points lost. UBS estimates pauses could put about 30% of 2028-planned capacity at risk.
Nvidia fell about 9% as Tuesday's election results, including data-centre restrictions in local ballots and wins for Democrats in Texas and Ohio, put the AI data-centre buildout in question.
The 10-year Treasury yield fell to about 4.85% on Thursday despite strong data, as the equity selloff drove safety bidding. Strong data (claims 189K, productivity 3.6%, unit labour costs -0.7%) and ~80% odds of a Fed hike on December 9 argue for higher yields, but the risk-off flow dominated the session.
The yield fell to about 4.85% because the equity selloff over the data-centre backlash drove demand for Treasuries, overwhelming strong jobless-claims and productivity figures.
The Dow Jones Industrial Average is on track for its worst session since April 2025, trading near 51,500 as investors react to a wave of local ballot measures restricting data-centre construction. Despite strong economic data, including 189K jobless claims and 3.6% productivity growth, the market is pricing in a potential slowdown in AI infrastructure spending. With 29 of 30 index members lower, the Dow remains under pressure as traders look toward Friday's payrolls report.
Investors are interpreting Tuesday's election results as a referendum against the data-centre buildout, following successful local ballot measures to restrict construction and Democratic wins in key states like Texas and Ohio.
Resistance is currently at the 50-day EMA near 52,150, while support is found at Thursday's low of 51,500, followed by the October 14 low of 51,400.