Nasdaq Fell 5.5% Thursday After Midterms, Rebounded 1.09% Friday, as Evidence on Data Centers and Power Prices Stays Split

The post-midterm fight over data centers moved from the ballot box to Wall Street this week. Since Democrats swept the Nov. 3 elections, the Nasdaq composite fell 5.5% on Thursday, Nov. 5, and rose 1.09% on Friday, Nov. 6, to close at 24,579.42, according to Newsweek's market report. The S&P 500 dropped 4.4% Thursday and gained 0.31% Friday. The Dow fell more than 1,800 points, or 3.4%, Thursday and slipped another 0.46% Friday.

Those were the worst one-day losses for all three indexes since April 2025, Newsweek reported. The Nasdaq entered correction territory, down more than 10% from its recent high. The Magnificent Seven collectively lost about $1 trillion in market value Thursday.

Friday's rebound recovered only part of the damage.

Ballot measures and the Texas question

Newsweek reported that data centers appeared in 41 ballot measures across 10 states on Election Day, and that in all but one, voters backed some form of restriction or ban. Its own AI Policy Scorecard analysis found that members of Congress who supported data centers were more likely to lose than colleagues who opposed them.

Texas is the biggest pressure point. Democratic Governor-elect Gina Hinojosa campaigned on an immediate moratorium on new data center approvals until protections on electricity, water and other concerns are in place. CNBC cited a Wells Fargo estimate that 27% of planned U.S. data center gigawatts sit in Texas.

Newsweek reported that Trump blamed the election results for Thursday's selloff, and that he has made AI infrastructure a core priority of his administration.

What the price research shows

The campaign case against data centers leans on one claim: they drive up electric bills. Democratic Senate candidate Sherrod Brown ran an Ohio ad saying no one near the facility is "getting a damn thing from it except higher electric bills." In Texas, Democratic Senate candidate James Talarico alleged his opponent's support for data centers led to "skyrocketing utility bills." AdImpact tracking shows tens of millions of dollars spent on ads making such claims, according to FactCheck.org.

Energy Secretary Chris Wright takes the opposite view. "The actual record of data centers coming on is they almost always are accompanied by a multiyear freeze in electricity prices," he said Sept. 17 at a Daily Caller event. "These are a massive force to reduce the price of electricity and stop the price rises."

The research supports neither side cleanly.

A July report from Lawrence Berkeley National Laboratory, a Department of Energy lab, and the Brattle Group found that load growth, including from large data centers, contributed to significant price increases in the PJM region in 2025. PJM is the nation's largest grid operator, serving more than 65 million people. The same report found that most price increases in recent years were not caused by data centers, and that through 2025, load growth was associated with lower retail prices overall. Texas prices have risen only modestly, FactCheck.org noted.

A Federal Reserve Bank of Dallas working paper, revised Oct. 9, goes further on wholesale costs. Economists Owen Kay, Robert Reaser and Reid Taylor modeled 23 regions and estimated data centers raised national wholesale electricity prices 6.9% in 2025. For the Arizona-New Mexico region they estimated an 8.6% effect, or $2.93 per megawatt-hour, across 2024 and 2025. They project 14.7% in that region by 2028 and 12.3% nationally.

Those are modeled wholesale figures, not household bills, and the paper is preliminary. It represents the authors' analysis, not the Federal Reserve System's position.

A new study highlighted Friday evening by The Washington Post concludes data centers are probably having only a small effect on residential electricity prices. The Post's post did not give figures.

Who pays for the grid

The policy fight is shifting from whether data centers raise prices to who carries the cost of connecting them. Sen. Martin Heinrich, D-N.M., released a fact sheet Thursday on bipartisan legislation that would make data centers cover the cost of transmission upgrades they create instead of shifting those costs to existing customers. The legislation has not become law, and its provisions would require additional regulatory action before taking effect.

Ohio has already done something similar at the state level. After AEP Ohio proposed a data-center-specific tariff, regulators approved a settlement requiring large customers to pay for up to 85% of their subscribed capacity even if they use less, with longer contracts and added collateral. In return, the connection moratorium was lifted, according to Seyed Madaeni, CEO of the energy software company Verse, writing in Utility Dive.

Demand is not going away. BloombergNEF's base case has U.S. data center capacity rising from 47 gigawatts in 2025 to 194 gigawatts in 2035. It forecasts record additions of solar, wind and storage of 89 gigawatts in 2026 and 93 gigawatts in 2027, and says on-site gas power gives data centers a dispatchable, lower-cost option.

Whether Hinojosa's Texas moratorium pledge becomes policy is the next test of how far the ballot-box message reaches.