Wall Street’s best post-midterm rally in 44 years lasted just one day—then $3 trillion vanished as chip stocks plunged over AI fears

Chip and AI stocks led a sharp Wall Street reversal that erased roughly $3 trillion in market value, one day after the best post-midterm rally in 44 years. The selloff was driven by fears that newly elected Democratic governors could pause data center projects, hitting semiconductor names that had powered the prior session's gains. The prior rally had marked the strongest post-midterm performance in over four decades before the sudden unwind. Analysts are divided on how long the pullback will last, with attention now on whether state-level policy signals translate into actual delays for data center construction. Investors will watch upcoming state budget and permitting decisions, along with chip sector earnings, for confirmation of whether the AI-driven demand story remains intact.