Asian markets reacted sharply on November 4, 2026, following a Democratic sweep in the U.S. midterm elections. Investors feared tighter regulations on artificial intelligence (AI) and cryptocurrency industries, along with potential hurdles for data center projects in key states. The dollar weakened as U.S. government bond yields fell, adding to the market jitters.
Semiconductor and AI-related stocks tumbled across Asia. In South Korea, Samsung Electronics (005930) and SK hynix (000660) ended slightly lower after early gains, while Kioxia in Japan dropped 5.4%. TSMC, a major player in Taiwan, slipped 1.5%. U.S. stock index futures also fell before recovering some losses.
Analysts warned of increased regulatory pressure under Democratic control. Jake Dollarhide of Longbow Asset Management noted that this could slow AI growth, while Nick Peles of Vantagepoint Asset Management highlighted tighter regulation risks for both AI and cryptocurrency. Tim Sun of HashKey added that cryptocurrency legislation could be delayed.
State-level policies also raised concerns, particularly in Texas and Georgia, where data center projects could face permitting and power supply disruptions. Tapas Strickland of Moomoo Australia-New Zealand warned that Democratic governors in these states could slow AI infrastructure buildout. Some analysts, however, dismissed the selloff as a short-term reaction rather than a reflection of actual sales declines.