By Fatma Younis
London’s financial markets slid on Friday morning as a major technology stock sell-off on Wall Street spread globally, wiping trillions of pounds from the value of AI-focused firms including chip makers and data centre operators.
FTSE 100 drops to four-week low
The FTSE 100 fell 1.6% after the open, reaching a four-week low, with US-exposed firms, technology businesses and pharmaceutical companies particularly affected. The more domestically focused FTSE 250 declined about 0.8%. London-listed technology firms Raspberry Pi and IQE were among the early decliners.
Asian markets follow Wall Street turmoil
Earlier on Friday, Asian markets dropped sharply following the US rout. Japan’s Nikkei fell around 6%, dropping below the 60,000-point level for the first time since May, weighed down by significant losses for SoftBank and Kioxia. South Korea’s Kospi index also slumped on sector weakness.
US markets lose $3 trillion in value
The sell-off originated in US equity markets, where approximately three trillion dollars of value was erased. The tech-focused Nasdaq 100 closed 6.4% lower, led by chipmakers and AI firms, with Nvidia sliding more than 9%. Shares in Tesla and SpaceX fell around 10% and 9% respectively, reducing Elon Musk’s net worth. The broader S&P 500 finished the session 4.4% lower as weakness spread across other sectors.
Analysts link downturn to election results and AI bubble fears
Analysts connected the turbulence to Democratic victories in the US mid-term elections, which raised concerns about a potential slowdown in the rapid AI boom. Susannah Streeter, chief investment strategist at Wealth Club, said the tech sell-off had intensified, with the Wall Street rout carrying through to Asia and knocking sentiment in Europe. She noted that while the FTSE 100 is more insulated given its “tech-lite” nature, it is not immune because listed multinationals depend on the global economy.
European indexes open lower
Elsewhere in Europe, the French CAC 40 and German DAX indexes opened 1.2% and 1.5% lower respectively. Ipek Ozkardeskaya, senior analyst at SwissQuote, said the S&P 500 shed more than 4% and the Korean Kospi fell 5%, adding that a memory-chip bubble had already burst around June and that the Nasdaq may have reached a boiling point where value is now evaporating.
Trump blames Democrats for market chaos
On Truth Social, President Donald Trump described the session as “one of the worst days in history” for the stock market and blamed Democrats for the market chaos.
