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SPY plunged 4% and DIA 4% as the S&P 500 posted its worst second day after a midterm in nearly a century.

SPY's heavy weighting leaves NVIDIA at 8% of the fund, while the price-weighted Dow held flat for the month with less AI exposure.

Chips cratered 12% and tech fell 7% as all 11 S&P 500 sectors dropped, with the VIX surging 70%.

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Two sessions after Democrats won the November 3 midterm elections, the S&P 500 fell 334.89 points, or 4.36%, to 7,353.73 on November 5, 2026. That was the worst second day after a midterm in nearly a century of data, and the drop was close to twice the roughly 2.3% decline that set the previous mark in 2002.

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The Dow lost 1,833.06 points, or 3.44%, to 51,523.06. On Wednesday it had gained 1,569.40 points to close at 53,356.12, so the selloff wiped out the post-election rally. The Nasdaq Composite fell 5.52% to 24,315.00, and the Russell 2000 dropped 4.45% to 2,729.89.

The State Street SPDR S&P 500 ETF Trust (NYSEARCA:SPY) fell 4.41% to close at $733.00. The State Street SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) lost 3.53% to $514.27. In evening trading, the two funds were quoted at $734.39 and $513.37.

All 11 S&P 500 sectors finished lower. Tech fell 7.3%, and the Philadelphia chip index lost 12%, the second-biggest drop in its history.

The VIX, Wall Street's measure of expected volatility, rose 69.66% to 28.18. By 2:58 p.m. ET, retail investors had sold a net $358 million of individual stocks. That count was incomplete, but it was on pace to be the largest since the $502 million sold on March 17, 2020.

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Three Explanations, With Gaps in Each

The first explanation is that a Democratic Congress could slow the build-out of AI data centers. On Election Day, voters backed limits in 40 of 41 local data center ballot measures. However, those were local zoning votes, and no company has yet reported a delayed/blocked project because of them.