Tech Stocks Plunge Worldwide as Midterm Result Sparks AI Slowdown Fears

Tech stocks plunge across the world for a second day as investors fear that the Democrats’ win in the US midterm elections will slow the artificial intelligence boom. The sell-off began on Wall Street on Thursday. It then spread through Asia and into Europe on Friday, wiping trillions of dollars off the value of the biggest technology companies. Figures are as of Friday, 6 November, about 3 PM PKT.

How the tech stocks plunge started on Wall Street

The Nasdaq index, which is heavy with technology firms, fell 5.5% on Thursday. According to The Guardian, it was the index’s worst day in 19 months. The BBC estimated that the Nasdaq lost about $2.5 trillion in market value. Meanwhile, Reuters reported that $3 trillion was wiped off companies in the wider S&P 500.

Chipmakers took the heaviest blows. Nvidia shares slid more than 9%, while AMD and Micron each dropped more than 17%. Memory maker SanDisk fell 22%, and Western Digital lost 17%. In addition, Tesla shed nearly 11% and SpaceX fell 8%, the BBC said.

Fear also rose sharply. Wall Street’s volatility index, the Vix, jumped 61% to its highest level since the first weeks of the Iran war. As a result, the Nasdaq now stands about 12% below the record it set a month ago.

Why investors are worried about AI

Democrats won both houses of Congress on Tuesday. During the campaign, many of their candidates opposed the huge data centres that power AI. Dozens of local ballot measures also aimed to restrict them. In Texas, Democratic governor-elect Gina Hinojosa promised a pause on new data centre construction.

Investors now fear tougher rules and a slower build-out. That worry lands on top of an older one. For months, analysts have questioned whether the vast sums spent on AI infrastructure will ever pay off.

“Big worries are colliding,” said Susannah Streeter, chief investment strategist at Wealth Club. She added that a slowdown in data centres risks hurting the spending spree behind the boom.

Some industry leaders admit they were caught off guard. OpenAI president Greg Brockman said companies must work harder to win over local communities. “You can’t just tweet and say: ‘This is going to be good,'” he told a Wall Street Journal conference.

Asia and Europe follow the fall

On Friday, the damage moved to Asia. Japan’s Nikkei closed down 6%, its sharpest single-day fall since April 2025. South Korea briefly paused trading as prices collapsed, and the Kospi ended about 6% lower.

Taiwan’s market closed down 4.5% after an even steeper early slide. For the week, it fell 12.2%, its biggest weekly loss since 1991, according to LSEG data cited by Reuters. Chip giant TSMC dropped as much as 8.5% before recovering to close 4.7% lower. Similarly, SK Hynix fell 9.4%, and SoftBank Group lost 11%.

Authorities stepped in to calm markets. South Korea’s finance minister eased rules on leveraged trading by retail investors. In China, state entities bought shares to steady prices, Al Jazeera reported.

Europe opened lower too. London’s FTSE 100 dropped 1.5% at the start of trade, while Germany’s Dax fell 1.5% and France’s Cac 40 lost 1.2%.

Pakistan Stock Exchange also slips

In Karachi, the KSE-100 index was down 1,494 points, or 0.85%, at 173,885.77 by the Friday prayer break, The Express Tribune reported. However, local analysts linked the fall mainly to profit-taking after this week’s strong rally, along with general caution.

Political blame and what comes next

President Donald Trump blamed his opponents. “The Stock Market crashed today because the Dumocrats had a big Tuesday,” he wrote on Truth Social. On the other side, Senator Bernie Sanders called for a national pause on new data centres.

Not everyone sees disaster ahead. Toby Walsh, chief scientist at the AI Institute of the University of New South Wales, told Al Jazeera the shake-out could let an AI bubble “deflate in a manageable way”. Some traders also said the selling looked like a final stage of panic.

Despite the losses, most major indexes are still up for the year. The Nasdaq, for example, remains about 4.6% higher than in January. Even so, investors will watch closely how the new Congress treats AI and data centres. For now, the question is whether this is a short correction or the start of a deeper reset.