Former President Donald Trump has blamed the Democratic Party for a stock market decline of approximately $2.5 trillion, which occurred the day after Democrats achieved significant gains in the midterm elections. Trump asserted on his Truth Social platform that the market suffered "one of the Worst Days in History" due to the election results, which saw Democrats gain control of the Senate and make substantial inroads in the House of Representatives.
"Your 401(k)s have, therefore, dropped. Remember, it wasn’t Republicans, it was Dumocrats," Trump wrote, coining a new nickname for the party. He also expressed confidence in a future recovery, stating, "Do not fear, however, we will soon, one way or another, be BIGGER AND STRONGER THAN EVER BEFORE."
The market's performance contrasted sharply with the previous day, when stocks saw gains following the initial election results. Trump had previously taken credit for a market surge, posting on Truth Social about "Record Setting All!" and "401(k)s are through the roof."
Stocks associated with artificial intelligence, data centers, and microchip manufacturing were particularly hard-hit. Companies like Nvidia and Broadcom experienced significant losses, with the Nasdaq Composite index falling 5.5 percent and the S&P 500 index dropping 4.3 percent. These were the largest single-day declines since April 2025, according to the report.
Analysts suggest that the selloff was influenced by a combination of factors, including the midterm election outcomes and disappointing earnings reports from tech companies. The high levels of investor leverage and speculation, nearing levels seen during the dot-com bubble, may have also contributed to market sensitivity.
Elon Musk, who reportedly invested nearly half a billion dollars in Republican candidates, saw substantial paper losses in his companies Tesla and SpaceX following the election results. Tesla shares dropped nearly 12 percent on the day, contributing to a nearly 15 percent loss over two days. SpaceX also experienced significant declines.
Looking ahead, Democratic leaders have indicated plans for increased regulation of AI, including mandatory safety testing, federal oversight of advanced AI models, and restrictions on data center expansion. The long-term impact of these potential policies on the AI buildout and data center construction remains uncertain. A wave of local ballot measures restricting data center construction also highlighted public opposition to such developments.