Global Tech Stocks Plunge After US Midterms Raise AI Worries

Overview

Global tech stocks plunged on Thursday and Friday after Democrats won Congress in the US midterms. Investors worried that tighter rules on AI data centres could slow spending and growth. The Nasdaq fell more than 5.5%, and Asian chipmakers dropped sharply.

Key Highlights

• Nasdaq closed down more than 5.5%, losing about $2.5tn in value.
• S&P 500 fell 4.4%, and the Dow fell more than 3.4%.
• The Kospi dropped over 8.5%, triggering a circuit breaker.
• Nvidia fell over 9%, wiping more than $400bn off its value.

What Happened?

Global tech stocks plunge after campaigns that centred on slowing AI and data centres ended in Democratic wins. Nvidia, AMD, Micron and Intel all fell, and Micron and AMD each lost more than 17%. The Philadelphia Semiconductor Index dropped over 12%. In Asia, the Nikkei opened 6% lower, SK Hynix and Samsung fell sharply, and TSMC lost nearly 8.5%.

Why Is It Important?

Dozens of ballot measures around the country aimed to restrict data centres. Texas governor-elect Gina Hinojosa campaigned on a moratorium on new construction. Investors are already worried about whether AI spending would pay off.

Impact and Implications

Susannah Streeter of Wealth Club said fears about AI returns are colliding with a possible slowdown in construction. Charu Chanana of Saxo said greater scrutiny of approvals could delay projects and raise costs. OpenAI’s Greg Brockman said the industry needs to work with communities. President Donald Trump blamed Democrats for the sell-off on social media, while Senator Bernie Sanders called for a national data centre moratorium.

What Happens Next?

Democrats now control Congress for the rest of Trump’s term and have promised AI safeguards. Asian markets will show whether the selling continues.