- ^IXIC
- SPCX
It’s been brewing for a while, hasn’t it? A stock market meltdown that is. And yesterday (5 November) investors put tech stocks on the bonfire, sending the Nasdaq Composite tumbling 5.5%.
This pushed the tech-heavy index into correction territory (down more than 10% from its recent high). But with lots of uncertainty swirling about, things could get worse. Even the tech-light FTSE 100 has fallen 2.2% today.
As such, I think it’s time to at least prepare for a stock market crash.
Political backlash
In the last 18 months, the market has shrugged off tariffs, AI spending concerns, and the inflationary war in Iran. But the rather large straw that broke the camel’s back was the Democrats winning the US midterm elections.
According to recent Pew Research polling, around half of Americans have an unfavourable view of data centres. Reflecting this, many Democrats ran campaigns promising to slow the growth of data centres and AI.
Texas, which has 31 ongoing data centre projects, voted for a Democratic governor pledging a moratorium on new projects.
All this has fed into fears that the AI boom will slow, potentially impacting the US economy.
What am I doing?
Now, it’s never nice to see stocks plunging in your portfolio. And mine has been a sea of red this week because I own quite a few tech stocks.
Here are some of the AI-related drawdowns in my portfolio in the past month:
Evidently, these are some painful drops. And if the US economy starts cracking, there’s the potential for things to get even worse.
So, what am I doing? Nothing yet. In my experience, it’s not wise to make wholesale changes to a portfolio after a sudden sell-off. I was happy with the stocks I owned last week, and nothing has changed since.
The market had a similar meltdown in April 2025 when President Trump unleashed tariffs on the world. Before that it was Covid, and before that Trump’s first term and Brexit.
Yet each time the stock market went on to recover, and I don’t think it will be any different this time. But I have no idea when and neither does anybody else.
What interests me?
If tech stocks nosedive further though, I’ll look to buy more SpaceX shares.
That might sound like a daft idea given that the firm is headquartered in Texas, where it’s building an AI semiconductor manufacturing facility. If SpaceX faces stricter local environmental rules, that could slow down its pace of development.
On the other hand, I think this backlash against data centres strengthens the case for SpaceX putting AI satellites into orbit. This could bypass terrestrial cooling, land, and electrical grid constraints by harnessing abundant solar power.
