Global tech stocks plunge as US midterms add to AI slowdown fears

Technology shares around the world suffered a brutal sell-off after Democrats swept the US midterm elections, raising fears that the breakneck expansion of artificial intelligence infrastructure will be reined in. The Nasdaq composite tumbled by more than 5.5%, erasing roughly $2.5tn in market value, according to Dow Jones data. Other major US indexes also had their worst sessions since 2025.

Election campaigns had focused heavily on slowing AI development, with dozens of local ballot measures targeting data centre construction. Democrats won control of both the Senate and the House of Representatives, giving them power to push for stricter oversight. In Texas, governor-elect Gina Hinojosa had promised a moratorium on new data centres, and her victory helped turn the state blue.

President Donald Trump blamed the market rout on his political opponents. In a social media post, he wrote: “The Stock Market suffered one of the Worst Days in History based on the results of the Election.” He added: “Remember, it wasn’t Republicans, it was Dumocrats.”

Chipmakers and AI firms hit hardest

Nvidia lost over 9%, wiping more than $400bn off its market capitalisation. AMD and Micron both plunged more than 17%, while Intel fell 10.3%. SanDisk tumbled over 22%. The Philadelphia Semiconductor Index dropped more than 12%. Even companies less directly tied to AI were caught in the downdraft: SpaceX fell 8% and Tesla nearly 11%, together shedding more than $300bn in value.

The so-called magnificent seven tech companies—Apple, Nvidia, Tesla and others—lost a combined trillion dollars in a single trading day. The S&P 500 closed down 4.4%, and the Dow Jones Industrial Average erased its Wednesday gains to finish more than 3.4% lower. The Nasdaq’s decline pushed it into correction territory, at least 10% below its recent peak.

Asian markets follow suit

Asian exchanges opened sharply lower on Friday. Japan’s Nikkei 225 was down 6% in early trading, with Kioxia losing over 12.6% and Tokyo Electron slipping 9.5%. In South Korea, SK Hynix fell more than 11.5% and Samsung nearly 10%, dragging the Kospi down over 8.5% and triggering a circuit breaker. Taiwan’s Taiex dropped more than 8.3%, with TSMC off nearly 8.5%.

Analysts said the sell-off reflects deepening worries about the huge sums being spent on AI infrastructure. Susannah Streeter, chief investment strategist at Wealth Club, said: “Fresh panic over the AI trade has hit Wall Street hard.” She noted that concerns about returns are now colliding with the prospect of a sharp slowdown in data centre construction.

Some tech leaders admitted they were caught off guard by the backlash. Greg Brockman, president and co-founder of OpenAI, said the industry needs to engage more with communities where data centres are built. “You can’t just tweet and say: ‘This is going to be good.’ You need to be in those communities,” he told a Wall Street Journal conference.