By Ahmed Abdelsalam
Global technology stocks plunged Friday as a dramatic selloff sparked by U.S. midterm elections spread from Wall Street to Asia and Europe, deepening fears about the durability of the artificial intelligence boom.
U.S. Markets Lead Selloff
The tech-focused Nasdaq 100 dropped 6.3% on Thursday, wiping $2.3 billion in market value, while the S&P 500 fell 4.4%, erasing $2.8 trillion — its worst day in 18 months. U.S. futures were mixed early Friday.
Asian Markets Hit Hard
Japan's Nikkei 225 fell as much as 6%, entering bear-market territory and suffering its worst week since 2020. South Korea's Kospi tumbled more than 8%, triggering a temporary market-wide trading halt; AI memory suppliers Samsung and SK Hynix plunged over 10% before paring losses. In Taiwan, home to critical chip supplier TSMC, the TAIEX index dropped 9%.
European Shares Decline
London's FTSE 100 opened 1.6% lower, while France's CAC40 and Germany's DAX took similar hits.
Analysts Link Rout to AI Exposure
"Markets are being punished according to their dependence on the U.S. AI infrastructure cycle," said Charu Chanana, chief investment strategist at SAXO Markets. Tai Hui, J.P. Morgan's APAC chief market strategist, noted that companies in Taiwan, South Korea and Japan are "clearly highly linked to the global AI capex cycle."
Political Shift Adds Uncertainty
The plunge followed midterm results that will bring a crop of anti-AI politicians to power, including Gov.-elect Gina Hinojosa in Texas, the largest U.S. data center market. A Democratic Congress could tighten scrutiny of AI infrastructure projects, potentially causing delays and added costs that worry investors.
Recent months have been a rollercoaster for Asian investors, who saw paper fortunes surge during the June AI stock boom but have since endured a brutal sell-off.
