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Japan’s Nikkei 225 fell about 7% at one point on Friday, as a sell-off in AI and chip stocks spread from Wall Street to Asia. The index pared some of its losses and was down 5.7% by midday in Tokyo.
Investors are weighing whether Democrats’ sweeping wins in this week’s US midterm elections could lead to tougher rules on new data centres. The projects have drawn opposition from voters across the political spectrum, and many candidates who won pledged to slow or halt construction. US Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez proposed a federal moratorium earlier this year.
The election results added to concerns about when companies will see a return on the hundreds of billions they have poured into AI. Higher borrowing costs have also raised questions about how quickly companies can build the data centres they need. A slowdown could weigh on US growth and dent demand for chips and electricity.
US chip stocks suffer worst day since 2020
The Philadelphia Semiconductor Index closed down 12.2% on Thursday, its biggest one-day fall since 2020. The drop left the index around 16% lower for the week through Thursday’s close. live.euronext.com
The Nasdaq Composite closed down 5.5%, the S&P 500 fell 4.4%, and the Dow Jones Industrial Average lost 3.4%. All three posted their steepest daily percentage losses since US President Donald Trump announced sweeping tariffs in April 2025. The Nasdaq ended the session 11.9% below its record high. apnews.com
Trump blamed Democrats for Thursday’s sell-off in a post on Truth Social, writing, “The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!”
Asian chip stocks slide, and European futures fall
In Tokyo, Kioxia and SoftBank fell more than 10% during trading, while Advantest dropped more than 8%. South Korea’s Kospi fell 8.8% at one point, triggering a 20-minute trading halt. In early trading, chipmaker SK Hynix was down about 10%, and Samsung Electronics fell about 8%.
Taiwan’s Taiex closed 4.5% lower after falling more than 8% early in the session. Shares in chipmaker TSMC fell as much as 8.5% during trading. Elsewhere, Hong Kong’s Hang Seng was down 0.7%, the Shanghai Composite 1.3% and Australia’s S&P/ASX 200 1% in Friday trading.
Neil Wilson of Saxo Markets said the sell-off looked overdone but that investors would want to see markets stabilise first.
Euro Stoxx 50 futures were down about 1% at around 07:30 CET, ahead of the European open.
Brent crude futures rose 1.4% to just under $100 a barrel in early trading, extending Thursday’s gains. Oil had fallen after the midterm results on hopes for an end to the Iran war. Traders continued to watch for signs of progress after US and Iranian leaders indicated earlier this week that talks were advancing.
The dollar strengthened against the euro and the yen in early trading. Spot gold fell 1.1% to $4,044 an ounce by 06:00 CET.
Additional sources • AFP&AP