Trump Blames Democratic Win For $3T Stock Market Rout, Promises Markets Will Come Back ‘Bigger And Stronger’

U.S. President Donald Trump blamed the outcome of midterm elections last week for a massive wipeout of the stock market.

In a post on Truth Social, the president said, “America took a giant step back in History with the results of the last Election — Even the Stock Market, which has been a “ROCKETSHIP” under “TRUMP,” took a one day, 3 Trillion Dollar loss.”

The selloff followed Democrats' sweeping election victory, which raised investor concerns that a Democratic-controlled Congress and newly elected state officials could push for tighter AI oversight and restrictions on data center development. These concerns add to existing pressure on the AI trade that was already showing signs of strain over the mounting cost of this buildout.

On Nov. 3, Democrats captured both chambers of Congress, posting a majority and flipping multiple Senate seats, House districts, governorships, and state legislative chambers, securing an early majority in the House and the Senate.

While markets initially traded higher, adding more than $1.2 trillion in market capitalization in their first day of trading after the midterms, as per The Kobeissi Letter, this reversed shortly after.

On Nov. 5, U.S. stock markets plunged sharply into negative territory, wiping out trillions of dollars in capital. The tech-heavy Nasdaq clocked its sharpest one-day decline since ‘Liberation Day’ in April 2025, as investors worried a Democratic win would mean higher AI scrutiny, a slowdown in data center construction, and an overall pullback in the AI sector.

The Kobeissi Letter noted in a post on X that the stock market crash could not be attributed solely to the Midterm Election results, as markets had already largely priced in the outcome.

“One of the most likely catalysts is growing concern about a potential ‘ban’ on AI, or at the very least, severe regulation of the industry. Over the last 24 hours, Democratic lawmakers have publicly called for restrictions on advanced AI development, including an outright ‘ban on artificial superintelligence,’” it said.

However, the market commentator noted that an outright ban was unlikely as it would effectively mean the U.S. was surrendering its position in the global AI race to China.

“Rather, we believe we are witnessing a sudden shift in sentiment colliding with excessive levels of leverage, potentially triggering forced liquidations by several major institutional investors. Therefore, today's downturn is more technical than fundamental. This is not to discount the concerns around regulation, they are legitimate. But price action right now does not look orderly or rational,” it said.

“We are in the midst of the biggest technological revolution in human history. Zoom out and remain calm,” the Kobeissi Letter added.

On Stocktwits, retail sentiment around SPY and QQQ was ‘bearish’ at the time of writing, while it was ‘bullish’ for DIA.