The US stock market and cryptocurrency market have faced renewed selling pressure today. Investors are reassessing the outlook for artificial intelligence (AI) companies following the Democrats’ sweeping midterm election victory. Concerns over tighter AI regulations, data center expansion restrictions and broader market uncertainty weighed on risk assets.

The Nasdaq Composite dropped approximately 5% during the session. The S&P 500 declined around 3.2%. The Dow Jones Industrial Average also fell about 2.1%. Technology and semiconductor stocks experienced some of the heaviest losses too. The Philadelphia Semiconductor Index dropped more than 9% during the session.

This decline comes as investors are concerned about stricter regulations and potential restrictions on data center construction. Higher borrowing costs and questions about the profitability of massive AI investments are adding to the pressure.

Bitcoin and Ethereum Face Renewed Selling Pressure

Cryptocurrency markets also declined alongside technology stocks. Bitcoin fell approximately 5.8% to around $75,800. Ethereum dropped roughly 7.3% to trade near $2,246. The latest declines followed an earlier recovery as Bitcoin traded above $81k yesterday.

Crypto derivatives markets recorded substantial liquidations during the price swings. Approximately $526 million in positions liquidated over 24 hours. Long positions account for nearly $480 million. These forced closures added to selling pressure as leveraged traders faced automatic position liquidations during the decline.

Democratic Election Victory Raises AI and Regulatory Concerns

Democrats secured control of both the House of Representatives and the Senate in the November 3 midterm elections. This marked a major political setback for President Donald Trump. The outcome has raised questions about the future regulatory environment for technology and cryptocurrency companies. Today’s sell-off erased a significant portion of the previous session’s recovery.

While the Democratic victory initially triggered concerns about tighter regulations, investors briefly welcomed the clearer political outcome. However, renewed pressure on AI and semiconductor stocks brought those concerns back into focus.

For cryptocurrency markets, weaker technology stocks, regulatory uncertainty and leveraged position liquidations has created additional pressure on BTC and ETH. The direction of the markets will likely depend on how investors assess the potential policy changes.