Global Markets Reel as Nikkei Tumbles Amid Tech Sell-Off
US midterm election results spark fears over AI investment, triggering widespread market declines across Asia and Wall Street.
Sarah Connor
Japan's Nikkei stock benchmark tumbled more than 6% after trading opened Friday.
South Korea’s Kospi index slumped. Technology firms saw trillions of pounds wiped from their value.
Elon Musk's companies felt the direct impact. SpaceX and Tesla stocks dipped 9 percent and 10 percent, respectively, on Thursday. Memory chip makers SanDisk, Micron, and AMD also experienced significant drops in their stock values, falling 22%, 17%, and 17% respectively.
The trading turmoil linked to worries that Democratic success in the US midterm elections could herald a slowdown in the rapid boom across the AI sector. Investors claim Democrats will curb the expansion of data centers that power AI systems. Analysts suggest Democrats are more critical of data centers, which could slow the rollout of AI investment.
President Trump claims Democrats' midterm victories caused the stock market nose-dive. On the day Trump took office, he revoked an executive order signed by President Joe Biden that required AI developers to share safety test results with the federal government.
Kyle Rodda states that regulatory and political risks arise at a time when the proverbial AI trade was already on shakier foundations. Rodda also claims that earnings season has been an overall disappointment for the markets. Magnificent Seven results so far undershot growth expectations and flashed warning signs that the pace of AI spending is slowing down.
Kyle Rodda indicated that Regulatory and political risks arise at a time when the proverbial AI trade was already on shakier foundations. Earnings season has been an overall disappointment for the markets. Magnificent Seven results so far undershot growth expectations and flashed warning signs that the pace of AI spending is slowing down.