Reported by Al Jazeera
Global markets roiled due to concerns that US midterm election results will lead to slowing data centre expansion and increased regulation of AI.
A tech stock rout that began overnight in the United States has persisted in Asian trading.
Market authorities in South Korea paused trading on Friday as prices plunged across the region. Global markets have been rattled by a sharp fall in the trading price of tech stocks, which is driven by fears that the Democrats’ victory in the US midterm elections will increase regulatory scrutiny of AI and slow the country’s data centre build-out.
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Japan’s Nikkei index slumped 6 percent, its deepest one-day drop since April 2025. Indices in South Korea and Taiwan plunged more than 8 percent after the opening bell, before cutting losses as authorities scrambled to stem the selling.
Wall Street’s volatility “fear gauge” soared overnight on Thursday and the tech-focused Nasdaq sank 5.5 percent, wiping $3 trillion off S&P 500 firms, as investors fretted that the Democrats could put the brakes on the AI boom being encouraged by President Donald Trump.
“It was a brutal morning for many investors here in Asia. We saw that the AI sell-off continues here across many countries,” Al Jazeera’s Katrina Yu reported from Beijing.
“Some of those major markets have fortunately recovered some of those losses, but all of them are still clearly in the red,” she said.
Analysts say the political jitters are hitting an AI trade already on shaky footing due to worries about returns on massive spending on related infrastructure.
“The selloff shows that AI stock prices had been built on rosy illusions about the future, and now that illusion is gone,” Dong Baozhen, chairman of asset manager Lingtong Shengtai, told the Reuters news agency.
“The US stock market has been the standard-bearer and backbone of the global AI bull run. Now that backbone has snapped. Can AI bull markets elsewhere hold up on their own?”
Markets cut some of their losses by the time Asian markets closed, as authorities worked to stem the panic.
Trading on South Korea’s Kospi market was temporarily halted…