Trump Blames Midterms for Wall Street Rout, but Warnings Piled Up for Months

Wall Street had a Thursday it won't forget. The Dow Jones Industrial Average shed 1,833 points, the S&P 500 dropped 335, and the Nasdaq Composite fell 1,422 — the steepest single-day point decline in the index's 55-year history. President Trump took to social media to lay the damage on the Nov. 3 midterms, calling it one of the market's "worst days in history," according to fool.com.

The election did leave a mark, just not the one Trump described. Democrats flipped five Republican governorships, and three of them — Texas, Georgia and Ohio — are linchpins of the AI data-center build-out. Texas Governor-elect Gina Hinojosa has vowed to block new data center approvals until the legislature passes rules on electricity, water and air rights. Trump's promised "Mr. Veto" act doesn't reach statehouses.

Valuations were already stretched thin. The S&P 500's Shiller P/E hit 42.84 in early June, roughly two and a half times its 17.45 average since January 1871. Over the past century the ratio has cleared 30 six times, and the prior five were followed by declines of 20% to 89% across the Dow, S&P 500 or Nasdaq, fool.com reported.

The bond market had been waving a flag too. Plenty of AI names are funding data-center expansion with debt priced at $1,000 par, and their bond prices have slid for months, pushing yields higher. That repricing points to real concerns about the build-out's risk — a warning that showed up long before any ballots were cast.