Symbolic imageTech rout spreads to Asia after Wall Street's AI sell-off
Asian stocks plunged on Friday after a historic tech sell-off on Wall Street, driven by fears of tougher AI rules under a Democratic Congress. US futures rose as dip buyers returned.
The chip sell-off continued in Asia on Friday, 6 November. According to Handelsblatt, Japan's Nikkei 225 fell as much as 6.7 percent to its April level, and South Korea's Kospi, dominated by Samsung Electronics and SK Hynix, dropped more than 8 percent at the open. Both recovered part of the losses during the day, and the Wall Street Journal reports the Nikkei closed 6.0 percent lower, its biggest loss in 1.5 years. The slide began on Thursday afternoon in Asia and deepened in New York, where the Dow lost 3.4 percent, the Nasdaq just over 6 percent and the Philadelphia semiconductor index just over 12 percent. The sell-off followed the Democrats' win of a majority in both chambers of Congress in the midterms.
Regulation fears and a disputed tally
Nomura's Naka Matsuzawa cites worries about stricter AI rules and excessive competition with China; many Democrats back local initiatives to regulate AI data centres. President Trump blames the Democrats, per Handelsblatt. The Wall Street Journal puts the loss at $2.5 trillion, while Bloomberg reports that fast-money systematic funds fuelled a $2.3 trillion rout.
Taiwan steps in, futures rebound
The Wall Street Journal reports that Taiwan activated market-stabilization measures and that the Taiwan dollar weakened on foreign equity outflows. Bloomberg reports that US stock futures rose as dip buyers emerged.