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Midterm market fallout reshuffles the AI trade as Nvidia turmoil deepens

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Summary

  • Democrats won control of both chambers of Congress in the November 3, 2026 midterms, setting off swings in AI, defense, and other stocks.
  • A post-election rally gave way to a rout on November 5 that wiped trillions from tech stocks, led by chipmakers and data-center suppliers.
  • Defense shares slid on fears a Democratic Congress will curb military spending and AI data-center buildouts.
  • Nvidia's selloff deepened and CEO Jensen Huang resigned on November 12, naming CFO Colette Kress interim CEO and reshuffling the AI trade.
  • Investors rotated into rivals including AMD, Broadcom, Alphabet, and TSMC, while commentary pointed to Canadian stocks as potential midterm winners.
  • Nvidia reports earnings on November 17, with markets watching guidance, the CEO search, and a coming Anthropic IPO.

Reactions

  • Elon Musk warned on X that some of Nvidia's critical supply deals were handshakes with Jensen Huang and would be lost, and signed a petition to reinstate him.
  • Treasury Secretary Scott Bessent called for a 'dramatic shakeup' at Nvidia and an outside CEO, questioning whether executives pressed illicit chip sales.
  • Nvidia investors Brad Gerstner and Gavin Baker urged the board to weigh all leadership options, including the potential return of Jensen Huang.
  • HSBC downgraded Nvidia to Hold and forecast the stock will struggle until a new CEO is named; analysts said Huang's exit could trigger a 20% correction.
  • President Donald Trump called Jensen Huang an 'honorable guy' who had 'done an amazing job for our country.'
  • Tom Lee called the Nvidia CEO scandal no thesis changer and said he was buying the tech dip; an analyst called the defense slide a buying opportunity.

Related

Timeline newest first

  1. Elon Musk warned on X on November 14, 2026, that some critical Nvidia supply deals were handshakes with Jensen Huang and would be lost after his resignation.
  2. Treasury Secretary Scott Bessent called for a 'dramatic shakeup' at Nvidia, urging an outside CEO and questioning executives' compliance with US export controls.
  3. Data centre construction stocks lost $4.2 trillion in value as the boom in the AI trade unravelled.
  4. Investors Brad Gerstner and Gavin Baker urged Nvidia's board on November 13 to weigh all leadership options, including the potential return of Jensen Huang.
  5. HSBC downgraded Nvidia to Hold and cut its target to $170, one of at least nine Hold-type downgrades since Jensen Huang's exit.
  6. Nvidia's latest earnings disclosed $164.5 billion in financial commitments, mostly contingent guarantees and backstops, that remained after Jensen Huang's exit.
  7. Dan Ives estimated the Democratic Congress could stall 10% to 20% of planned data centers while keeping a buy rating on Nvidia.
  8. Defense stocks slid on fears Democrats will curb spending, while commentary laid out how Canadian stocks could be big winners of the US midterms.
  9. Analysts flagged big tests ahead for the AI trade in the coming week, starting with Nvidia's November 17 earnings and capped by an Anthropic IPO.
  10. Nvidia posted its longest losing streak since 2012 after its latest weekly losses.
  11. AMD fell 11% and Broadcom and Intel 6% on November 13 as the rotation out of Nvidia into its rivals ran in reverse in a tech-led selloff.
  12. Nvidia fell 4.3% on November 12 after Jensen Huang resigned as CEO, pulling all three major averages lower, as the 10-year Treasury yield finished at 5.1%.
  13. Nvidia lost the world's most valuable company title to Apple, worth $5.2 trillion, after shedding roughly $1.6 trillion in value since early October.
  14. Analysts saw limited near-term impact from Nvidia's leadership change on Asian chipmakers, though SK Hynix closed 3.03% lower on Friday.
  15. Nvidia shares plunged 11% in the week while rivals AMD and Broadcom gained 30% and 24% and TSMC rallied 11%.
  16. The Nasdaq fell 0.91% on November 13 as Nvidia slid again, capping the best week for all three major indexes since August; Apple hit a record and bitcoin fell below $70,000.
  17. Alphabet climbed 3% on November 12 as Nvidia fell 6%, with Microsoft up 2% and Amazon up 1%, as investors weighed its TPU chips against Nvidia's.
  18. Sandisk, Micron, and SK Hynix each slid 3% on November 12 as Nvidia's shake-up hit memory stocks.
  19. Nvidia shares dropped as much as 14 percent on November 12 after Jensen Huang stepped down, extending a decline that erased more than $1 trillion in a month.
  20. Nvidia shares plunged about 8% in after-hours trading on November 11 amid reports of a second affair by Jensen Huang and board debate over his ouster.
  21. Nvidia rose 4% to $175.23 on November 11 despite Baird cutting it to Neutral with a $200 target and Morgan Stanley dropping it as top semiconductor pick.
  22. Morgan Stanley's Andrew Sheets said the S&P 500 rose a year after every midterm from 1982 to 2022 and urged investors to avoid election-driven portfolio swings.
  23. The S&P 500's 2.68% fall for the week ending November 6 was its worst since the April 2025 tariff crash, driven by selling in AI stocks after the midterms.
  24. Nvidia closed at $186.71 on November 6, down 8.76% for its fifth straight losing week, erasing an estimated $1.27 trillion in market value.
  25. Jensen Huang lost $15.1 billion on November 5 as Nvidia fell 9.26% and shed about $450 billion in market value after the midterm elections.
  26. A global tech rout wiped more than $3.2 trillion from US markets after the Democrats' midterm sweep, with the Nasdaq falling 5.5%.
  27. Defense stocks sank after Democrats won both chambers on November 3, with Lockheed Martin falling 6.88%, its worst session since July 2025, as the $1.5 trillion budget looked out of reach.
  28. The Nasdaq fell 5.52% on November 5, its deepest one-day drop in 19 months, as chipmakers sank on fears of tougher AI regulation, erasing $3 trillion in value.
  29. Stock futures slid on the night of November 3 as Democrats' victories raised fears for the AI boom; JPMorgan warned of an AI sell-off on assumed higher regulation.
  30. Stocks rallied on November 4 as Democrats won 54 Senate and 237 House seats in a midterm sweep, with analysts saying likely gridlock reassured investors.
  31. AI-linked stocks slid overnight after Gina Hinojosa's projected Texas governor win raised fears of data center restrictions in a state holding 27% of planned gigawatts.
  32. On November 4 the Dow rallied 1,569 points, its best post-midterm day in 44 years, while AI and defense stocks fell after Democrats won both houses.

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