Could the Election Make the Tech Stock Drop Much Worse?
MarketWatch said on October 15, 2026 that if Democrats win big in the November 3 midterms, the current drop in tech stocks could turn into a crash.
Tech was already falling. Global tech stocks fell on October 15 after a sharp drop on Wall Street on Wednesday following a strong U.S. inflation report, according to CNN. Stocks tied to AI fell as higher borrowing costs hurt companies with large debts, such as CoreWeave and Oracle, according to Reuters. A day earlier, Reuters reported big AI companies were hit hardest among the riskiest AI borrowers after a hot CPI report, according to Reuters. CPI means Consumer Price Index. It measures inflation, or how fast prices rise.
Only a few stocks were holding the market up, like a team carried by a few star players. The S&P 500, a list of 500 large U.S. companies, was up 14% for the year as of October 7 despite high oil prices, according to Al Jazeera. That gain came mostly from AI tech stocks. The middle stock in that list was up less than 5% in 2026, according to Reuters. On October 8, the Nasdaq and S&P 500 closed sharply lower as AI stocks fell and oil prices jumped, according to Investopedia. World stocks slipped Tuesday as worries about AI spending hurt chipmakers, according to Reuters.
Suppliers are now falling too. A drop in AI supplier shares on Tuesday was described as the strongest sign yet that views on AI stocks are changing, according to Reuters. Earlier this year, selling had centered on fears AI will hurt software companies, according to Yahoo Finance.
Election Day is November 3. Democrats need four extra Senate seats to control the Senate, according to NBC News. In October 2026, Democrats led Republicans by nearly 9 points on average when voters were asked which party they back for Congress, according to Yahoo. That is above an October 13 reading of 49.7% to 41.1%, a gap of 8.6 points, according to Forbes, and an October Reuters/Ipsos poll with Democrats ahead 43% to 35%, according to Reuters. MarketWatch had earlier said the midterms will likely be a "non-event for S&P 500 fundamentals" either way, but a Democratic sweep could affect several business areas, according to MarketWatch.
The broader context here is two problems meeting at once. First, only a few AI stocks drive the market, so when they fall the whole market falls. Second, many AI projects were built with borrowed money, like buying with a large loan. When inflation pushes borrowing costs up, it lowers what future profits are worth today and makes it harder for the most indebted companies to refinance.
In my view, an election sweep matters more for tech rules than for total profits. Split control in Washington tends to leave tax, competition, data, and energy permits for data centers unchanged. A sweep would force investors to rethink those rules while rates and oil already hurt growth. That mix can speed up selling. It would not need a change in 2027 company earnings to cause a sharp tech price fall.
Looking toward November 3, stress is moving from loans to stocks. Watch borrowing costs for AI companies, cuts to supplier orders, and whether selling stays in software and chips or spreads to the big cloud companies. Polls are not results. They have known errors around who votes and how that turns into Senate seats. The risk is investors still expect little impact while markets already show debt stress.
