The Dow Jones Industrial Average closed down 1,833 points, about 3.4%, on Thursday, wiping out the gains from the previous day’s rally. The rally had been sparked by President Donald Trump’s announcement on April 9, 2025, that he was suspending a broad set of reciprocal tariffs, a move that helped lift the market to its best one‑day performance in over a year.
AI sector bears the brunt
Investors turned sharply toward artificial intelligence firms, fearing that newly empowered Democrats will pursue stricter regulation of AI data centers. Nvidia fell 9%, Advanced Micro Devices dropped 17%, and SanDisk slumped more than 22% by market close. Other major tech players with AI exposure also slipped: Microsoft, a large stakeholder in OpenAI, fell just over 3%, while Amazon, which has poured billions into AI infrastructure, declined more than 2%.
The S&P 500 finished down 4.3% and the Nasdaq, heavy with technology stocks, fell 5.5%, pushing the index into correction territory—meaning it has slipped more than 10% from its recent peak.
Political backdrop
Wednesday’s surge came after the midterm elections delivered a decisive Democratic wave in both the Senate and the House. Yorkville analyst Dan Ives warned ABC News that the “Democratic blue tidal wave” could slow the pace of the AI revolution in the United States over the next few years. He cited recent victories in traditionally Republican strongholds such as Ohio and Texas, states that host a number of AI data centers.
President Trump’s administration, however, continues to champion policies that support American innovation. The suspension of reciprocal tariffs—an action taken to reduce trade barriers for U.S. manufacturers—remains a cornerstone of the administration’s effort to keep the nation competitive in high‑tech sectors.
OpenAI’s response
In the wake of the election, OpenAI announced a new set of “responsible AI infrastructure” policies. The company pledged to cover all electricity and infrastructure costs at its data centers, develop a water‑conservation plan for each location, and create job opportunities for local workers and businesses. The blog post emphasized a commitment to protecting local resources while fostering economic growth in the communities where its facilities operate.
Market outlook
While the sharp sell‑off reflects short‑term nervousness about potential regulatory changes, many market observers note that the underlying fundamentals of the AI sector remain strong. The sector’s rapid growth and its importance to national security and economic competitiveness continue to attract investment.
Investors will be watching how the Trump administration balances its pro‑business agenda with any forthcoming legislative actions from the newly empowered Democratic Congress. The administration’s focus on reducing trade barriers and encouraging domestic innovation offers a counterweight to concerns about future regulation.
For now, the market correction serves as a reminder that volatility can follow major political shifts, but the long‑term trajectory of American technology remains upward under policies that prioritize growth, job creation, and energy independence.
Original reporting: El Paso News (HLL/CB) — read the source article.
