Asian and European markets follow US tech rout with many analysts predicting more waves of selling to come

European and Asian stock markets fell sharply on Friday after the Democrats’ decisive victory in the midterms triggered a rout in US tech stocks a day earlier.

A sell-off on Wall Street on Thursday was followed by sharp falls in Asian stock markets on Friday. The investor sentiment then reached London, where the market was, at one stage, poised for its worst day since March.

Nearly $2tn shaved off Nasdaq value as worries of curbs to AI datacenters ripple across bourses

The Nasdaq share index had its worst day in 19 months after slumping 5.5% on Thursday amid growing signs that the artificial intelligence industry will face tougher regulation because of the midterm election results.

As Wall Street sustained widespread losses, the Nasdaq composite tumbled into “correction territory” – more than 10% below its recent record high – with more than $2tn shaved off its value by the end of trading Thursday. The tech-heavy index had its biggest one-day fall since Donald Trump announced his “liberation day” tariffs on US trading partners in April 2025.

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US stocks have surged as investors digest the Democrats’ victories in the midterm elections, lifted by hopes that Donald Trump’s turbulent policymaking would be restrained and shaking off initial fears about the impact on growth in the world’s largest economy.

The Dow Jones rose close to 3%, its best day in over a year, while the tech-heavy Nasdaq and the benchmark S&P 500 gained about 1.5% each when markets closed on Wednesday afternoon, turning around overnight falls in US stock futures after the news that the Democratic party won control of the Senate and the House of Representatives.

Midterms didn’t appear to have huge impact, though predicted wins for Democrats could mean more regulation

US tech stocks made a recovery on Tuesday afternoon after a selloff spooked investors over AI spending.

Tuesday’s midterm elections didn’t appear to have a huge impact on Wall Street, though investors are predicting Democrats get at least a majority in the House and potentially gain seats in the Senate, which could lead to more AI regulation.

Big tech stocks falter as investors question whether billions being poured into AI can generate returns quickly enough

A sell-off of tech stocks that began earlier this month and gained steam with disappointing earnings from leading tech companies drove US markets down by hundreds of billions of dollars on Friday. In total, the decline has knocked nearly $1tn in value off the tech-heavy Nasdaq exchange in one week and erased about $2tn in a month.

The S&P 500, the index of the 500 most valuable companies in the US, fell by more than 1% Friday, losing hundreds of billions of dollars in market value. It was on track to erase its gain for October, even though it set its all-time high during the same month. The weakness for technology stocks dragged the Nasdaq composite down even further, more than 3%, also erasing hundreds of billions in value. The Dow Jones Industrial Average fell less.

Datacenter and chip costs fueled sharp decrease in AI sector although non-AI stocks still had a strong showing

The latest shudder for stocks in the AI industry pulled markets lower worldwide on Thursday, while oil prices hit their highest levels since May on worries about the war with Iran.

The S&P 500 fell 1.2% for its worst day since July, while the Nasdaq composite tumbled 2.6%. The weakness for tech stocks was so overwhelming that it masked strength for the rest of the US market, in which the majority of stocks actually rose. The Dow Jones Industrial Average added 11 points, or less than 0.1%.