Tech stocks plunge as US midterm results spark AI slowdown fears
Major technology firms in the US and Japan lost hundreds of billions of dollars in market value following Democratic wins in the midterms.
Major technology stocks in the US and Japan saw a massive sell-off after the US midterm elections sparked concerns regarding a potential slowdown in artificial intelligence development, according to BBC News.
The Nasdaq composite index closed down by more than 5.5 per cent, losing an estimated $2.5tn in market value. Other US indexes also saw significant losses, with the S&P 500 falling 4.4 per cent and the Dow Jones Industrial Average closing down more than 3.4 per cent.
In Japan, the Nikkei 225 was 6% lower in early trading. Memory chip maker Kioxia lost over 12.6%, while Tokyo Electron slipped by 9.5%. In South Korea, the Kospi index plunged more than 8.5%, triggering a circuit breaker to halt trading.
The market decline follows Democratic wins in the US Senate and House of Representatives. During campaigns, Democrats ran on platforms to slow the development of AI and data centres. Texas Democratic governor-elect Gina Hinojosa has pledged a moratorium on new construction in the sector.
Nvidia shares slid more than 9%, reducing the firm's market value by over $400bn. Other chipmakers AMD and Micron dropped by more than 17%, while Intel fell 10.3% and SanDisk plunged more than 22%. Elon Musk's companies SpaceX and Tesla fell 8% and nearly 11% respectively.
In a social media post, Donald Trump blamed the slide on his political opponents, stating the market suffered due to the election results. Senator Bernie Sanders also posted on X that Americans do not want Big Tech oligarchs threatening the future.