Wall Street's post-election rally playbook fails: Nasdaq 100 plunges 6.4%, $2.3 trillion in market value wiped out, AI computing power bubble under pressure

The Nasdaq 100 plunged 6.4% in a single session—its worst one-day drop since 2020—erasing roughly $2.3 trillion in market value as the post-midterm-election rally script failed and selling spilled into Asian and European assets. The selloff centered on AI infrastructure: Democratic midterm gains raised expectations of stricter energy and environmental reviews for hyperscale data centers, prompting investors to cut two-to-three-year AI capex growth forecasts over grid-connection and permitting delays. The move was amplified by crowded positioning, with quant funds triggering programmatic stop-losses after volatility thresholds broke and discretionary hedge funds' concentrated long books stampeding; Erlen Capital Management said risk desks are forcing across-the-board exposure cuts as paper losses breach limits. Stress spread to credit, with Bloomberg reporting ING seeking to offload about $500 million in data-center-specific loans within days of the election, signaling lender caution on the debt-service and refinancing outlook for power-hungry infrastructure. The credit pullback and equity unwind are reinforcing each other, pushing institutions to tighten valuation tolerance across the entire compute supply chain.