Correction? AI stocks tumble post midterms

US stock market update: Dow Jones rallies today after Democrats win Congress - Democrats have won both the Senate and the House, and the stock market liked it. By 10:44 am ET on Wednesday, the Dow Jones was up 1,245 points, or 2.40%, at 53,032. The S&P 500 rose 1.52% and the Nasdaq gained 1.82%. But not every stock joined in. Data centre companies, Tesla and SpaceX fell. Democrats made gains in Texas and Georgia, where public opposition to new data centres is growing, and investors fear tighter rules could slow the AI boom.Democrat Gina Hinojosa defeated Governor Greg Abbott after promising an immediate pause on new data centre projects until lawmakers introduce stronger safeguards. The result added to pressure on AI infrastructure stocks, with CoreWeave falling 7%.The concern is significant because Texas accounts for an estimated 27% of planned US data centre capacity, according to Wells Fargo.Will a Democratic Congress slow the AI boom? Why data center stocks fell as the Dow gained 1,100 points The Dow Jones Industrial Average rose 2.13% to 52,889.71, gaining 1,102.99 points. The S&P 500 climbed 1.49% to 7,681.76, while the Nasdaq Composite advanced 1.97% to 25,871.41.ALSO READ: US stock market stages big rally today: Why is Dow Jones surging? Dow jumps 1,100 points as S&P 500 and Nasdaq turn green, with healthcare stocks at the centreWith Republicans losing control of both chambers of Congress, President Donald Trump's administration could face greater difficulty passing major policy changes.Investors also saw the election outcome as a way to reduce uncertainty. Markets had been watching closely for the results because changes in Congress could affect tariffs, government spending, energy policy and regulations.Scott Chornert, head of US equity strategy at Citi Research, described the election as a clearing event, suggesting that investors could now move beyond the uncertainty surrounding the vote.Amazon was among the strongest performers in the technology sector. Its shares gained around 7.1%, while Alphabet rose 3.4% and Meta Platforms added 1.6%.Other major technology stocks also moved higher. Apple and Microsoft gained nearly 6% in morning trading, according to market reports.McDonald's also climbed around 3.9% after reporting quarterly profits above market expectations. Amgen gained about 3% following its results.Block shares jumped 15% after the payments company raised its full-year gross profit outlook.Tesla and SpaceX sharesElon Musk's companies moved in the opposite direction. SpaceX shares fell around 1.9% to $138.91 in the supplied market data, while Tesla declined nearly 4% in morning trading.Musk had spent heavily backing Republican candidates during the election campaign. The Democratic victories could bring greater scrutiny of some of his business interests, particularly government contracts, artificial intelligence and the proposed merger between Tesla and SpaceX.AI and data centre stocks face fresh pressureThe election results also brought attention to the future of the US artificial intelligence industry.Democrats made gains in states such as Texas and Georgia, where local opposition to the rapid expansion of data centres has been growing.Data centres require large amounts of electricity, land and water. Their expansion has raised concerns about power costs, local infrastructure and the impact on nearby communities.Investors are now considering whether tighter rules could delay new projects and affect companies supplying equipment and computing services.Shares of data centre operators, including IREN, Hut 8, Applied Digital and Core Scientific, fell between 1.2% and 13%.Nvidia shares slipped 0.41% in the supplied market snapshot, while AMD gained around 4.8% after issuing a stronger growth outlook for 2027.Solar stocks rise while defence shares fallClean energy companies were among the biggest beneficiaries of the election outcome.The Invesco Solar ETF jumped 8.3% as investors considered the possibility that federal support for solar and other clean energy projects would remain in place.Defence stocks moved lower. Northrop Grumman and Lockheed Martin each lost more than 4% in morning trading.The change followed concerns that a Democratic-controlled Congress could make it harder for Trump to secure approval for his proposed $1.5 trillion defence budget.Palantir also fell around 1% amid concerns about its exposure to government and defence contracts.Oil falls while gold and cryptocurrencies move higherWTI crude oil fell 2.31% to $93.87 a barrel, while Brent crude declined 2.27% to $101.25. Investors were watching developments surrounding the US-Israeli war on Iran and its possible impact on oil supplies and inflation.Gold futures rose 2.53% to $4,040.10 an ounce. Silver gained 4.40% to $51.94.Cryptocurrencies also moved higher. Bitcoin rose 3.69% to $80,500.84, while Ether gained 6.68% to $2,433.23. XRP advanced 3.01% to $1.32.The US 10-year Treasury yield also moved lower, falling to…