Global tech stocks suffered a massive sell-off following the US midterm elections, which raised concerns about a slowdown in artificial intelligence (AI) development. The tech-heavy Nasdaq composite index closed down by more than 5.5% on Thursday, losing an estimated $2.5tn (£1.9tn) in market value, while other key US stock indexes also saw significant losses in their worst days since 2025.
The sell-off extended to Asia on Friday, with tech-heavy indexes falling sharply. In Japan, the Nikkei 225 dropped 6.3%, with memory chip maker Kioxia losing almost 11.5% and Tokyo Electron slipping by 5.8%. South Korean chipmaker SK Hynix fell by more than 8.8%, and Samsung was down by around 6%, triggering a circuit breaker in Seoul. The Taiwan stock market also saw its biggest weekly decline since 2001, with the Taiex falling by 4.5% on Friday.
The Democratic wins in the midterms, which focused on slowing AI development, added to broader concerns about the massive spending on AI infrastructure. Pressure on data centres intensified as Democrats campaigned to restrict their development. President Donald Trump blamed the slide on his political opponents, while some Democrats argued for greater oversight of AI.
Shares in companies heavily exposed to AI data centres, including chipmakers and semiconductor manufacturers, fell sharply. Nvidia shares slid more than 9%, knocking over $400bn off its market value. Other chipmakers like AMD and Micron dropped by more than 17%, while Intel shares fell by 10.3%. The Philadelphia Semiconductor Index fell by more than 12%. Elon Musk's companies SpaceX and Tesla also plunged, falling 8% and nearly 11% respectively, shaving over $300bn off their market value.