Tech shares slump across US and Asia following Democrat victories in midterm elections

UPDATE - follow-up to Major tech stocks plunge as US midterms add to fears of AI slowdown: Democratic wins in the US midterm elections have triggered a massive drop in tech stocks across the United States and Asia amid worries over artificial intelligence development. The Nasdaq composite index dropped by over 5.5% and lost an estimated $2.5 trillion in value, according to Dow Jones data, marking its worst session since 2025. Other major US indexes also suffered heavy losses, with the S&P 500 falling by 4.4% and the Dow Jones Industrial Average dropping over 3.4%.

Asian Markets

Asian stock markets opened sharply lower on Friday morning as semiconductor and chip-making companies saw their shares slide. Japan's Nikkei 225 fell by 6%, with memory chip maker Kioxia dropping over 12.6% and Tokyo Electron sliding by 9.5%. In South Korea, SK Hynix fell by more than 11.5% and Samsung dropped nearly 10%. The sell-off pushed the Kospi index down by more than 8.5%, forcing a circuit breaker mechanism to temporarily halt trading.

Market Impact

Individual US tech giants took severe hits, with Nvidia shares sliding more than 9% and wiping over $400 billion from its value. Chipmakers AMD and Micron both dropped by more than 17%, Intel fell 10.3%, and SanDisk plunged over 22%. Elon Musk's companies also suffered, with SpaceX and Tesla falling 8% and nearly 11% respectively. The seven largest tech firms shed a combined trillion dollars in value in a single day.

Political Reaction

Democrats secured control of both the US Senate and House of Representatives after campaigning heavily on slowing down AI growth and data centre construction. Texas Democratic governor-elect Gina Hinojosa pledged a moratorium on new data centre construction, while Senator Bernie Sanders called for a national moratorium on X. President Donald Trump blamed his political opponents for the market slump in a social media post, while MarketWatch chips analyst Britney Nguyen described the sell-off as a continuation of worries over AI infrastructure spending.

Context

Stock markets often react sharply to political shifts that threaten heavy regulation or restriction on high-growth industries like artificial intelligence. Data centres require massive amounts of power and land, making them a frequent target for local and national political campaigns.