Wall Street just got a reminder of what happens when borrowed money meets a falling market.

The Nasdaq lost 5.5% Thursday, wiping out $2.5 trillion in market value. Investors were already questioning the AI boom. Then the midterm results raised fears that new political opposition could slow data center construction, including in Texas, where the governor-elect campaigned on a temporary halt to new projects. But the selling didn’t stop with investors changing their minds. Hedge funds using borrowed money were forced to raise cash, adding more selling pressure. That’s the leverage problem. Margin debt is now $1.48 trillion, and the debt-to-GDP ratio is sitting near its historical record. Monday brought a sharp rebound, but the underlying exposure hasn’t disappeared. It doesn’t take a recession to start a forced-selling spiral. Sometimes all it takes is one crowded trade going the wrong way.