Major tech stocks plunge as US midterms add to fears of AI slowdown

Key points

• The Nasdaq fell more than 5.5%, losing about $2.5tn in value, its worst day since 2025.
• Democratic midterm wins raised fears of slower data centre construction, hitting chip stocks.
• Asian tech indexes fell sharply, with Seoul's Kospi down over 8.5% and trading halted.

Tech and AI shares fell sharply after Democratic wins in Tuesday's US midterms, with the tech-heavy Nasdaq composite closing down more than 5.5% and losing an estimated $2.5tn (£1.9tn) in market value, according to Dow Jones data. Other key US indexes also had their worst days since 2025.

Democrats campaigned on slowing AI growth and data centres, and dozens of ballot measures sought to restrict the hubs. They won both the Senate and House, taking control of Congress for the rest of Donald Trump's presidency.

Chipmakers and Asian markets

In Asia on Friday morning, Japan's Nikkei 225 was 6% lower, with Kioxia down over 12.6% and Tokyo Electron down 9.5%. South Korea's SK Hynix fell more than 11.5% and Samsung nearly 10%, sending the Kospi down more than 8.5% and triggering a circuit breaker.

In the US on Thursday, Nvidia slid more than 9%, AMD and Micron each dropped over 17%, and the Philadelphia Semiconductor Index fell more than 12%. The S&P 500 fell 4.4% and the Dow closed down more than 3.4%.

Fresh panic over the AI trade has hit Wall Street hard

— Susannah Streeter, chief investment strategist at Wealth Club

Reaction from leaders

Trump blamed the slide on his opponents, saying the market suffered "one of the Worst Days in History" because of the election results. Senator Bernie Sanders called for a national data centre moratorium.

MarketWatch chips analyst Britney Nguyen described the sell-off as a "continuation of worries" over AI infrastructure spending. OpenAI's Greg Brockman said the industry had been surprised by the data centre backlash and needed to work with communities.