NASDAQ wipes out $2.5tr as Trump blames 'Dumocrats' for market rout

US President Donald Trump on Thursday (local time) blamed the opposition Democratic Party for the crash in New York stock markets.

Trump took to his Truth Social account to say the stock market had experienced "one of the worst days in history" following the election results, calling it "a really sad thing to watch," according to Yonhap.

"It took a lot of work to get to levels never seen before, and now this has happened. That's why your 401(k)s are down," Trump said. "Remember, this is the fault of the 'Dumocrats,' not the Republicans."

He urged the public not to be afraid, adding, "We will soon be bigger and stronger than ever before, one way or another."

On the day after the midterm elections, New York stocks had leaped as the Democratic Party's capture of congressional power eased political uncertainty and raised hopes for an early end to the Iran war.

But those gains reversed sharply as concerns grew that a Democratic victory could lead to tighter regulation of the AI industry, sending all three major New York stock indexes tumbling in a single session, led by AI and technology shares.

The Dow Jones Industrial Average closed down 1,833.06 points, or 3.44 percent, at 51,523.06, according to Yonhap.

The tech-heavy NASDAQ Composite plunged 1,421.52 points, or 5.52 percent, to finish at 24,315.00, while the S&P 500 fell 334.89 points, or 4.36 percent, to close at 7,353.73.

The combined market cap of NASDAQ Composite components shed approximately $2.5 trillion — the largest single-day point drop in the index's history.

The percentage declines for both the NASDAQ and the S&P 500 were the steepest since April last year, when New York markets were rattled by Trump's announcement of reciprocal tariffs.

The NASDAQ has now fallen more than 10 percent from its all-time high set last month, with some analysts saying the index has entered a technical correction.

The Chicago Board Options Exchange Volatility Index, known on Wall Street as the "fear index," climbed as high as 28.09 during trading, hitting its highest level in eight months.

Concerns about tighter data center regulation are also mounting after the Democratic Party secured victories not only in Congress but also in key states such as Texas and Georgia, where data center construction is heavily concentrated.

Those concerns are feeding into broader worries that the massive capital expenditure and semiconductor demand that have underpinned AI-related share price gains could slow more quickly than expected.