S&P 500 falls 4.3% on Nov. 5, erasing $2.9 trillion

The selloff was triggered by midterm elections that put several governors into office vowing to restrict data center construction and seated congressional candidates skeptical of AI in Washington. The resulting doubt about how quickly the artificial intelligence boom can continue hit Wall Street hard: the S&P 500 and Nasdaq Composite posted their largest single-day declines in market capitalization on record, and the Nasdaq Composite is now 11.9% below its record high, placing it in correction territory.

Historical patterns argue for a rebound. Since 1950, the S&P 500 has averaged a 15% return in the six months following midterms, the strongest such period in the four-year presidential cycle, according to Carson Investment Research. With the index finishing October at 7,580, that average would imply 8,717 by April 30, 2027 — about 19% upside from 7,353. Separately, the Nasdaq Composite has entered correction territory 10 times in the last decade, including now, and has averaged a 21% return in the 12 months after its first close in correction territory since 2016; after entering correction in March 2026, it had already advanced 14% before the recent drawdown.

The S&P 500 is currently 5% below its high, and under such circumstances the index has returned a median of 6% over the next three months, per Goldman Sachs. It suggests investors can get exposure through the Vanguard S&P 500 ETF (VOO), the Fidelity Nasdaq Composite ETF (ONEQ), or the Invesco QQQ Trust (QQQ), noting QQQ's lower expense ratio and greater liquidity, and its 15.8% annual gain over 20 years versus 13.6% for ONEQ.