Election-driven AI fears weigh on markets
The DAX had reached a record 26,692 points on Thursday before US markets turned sharply lower. Consorsbank market analyst Jochen Stanzl said the Wall Street slide reflected a risk investors had feared for months: steep losses in a handful of technology heavyweights pulling down the major indexes. He said concerns that Democrats could halt AI expansion were hurting sentiment.
The US selloff on Nov. 5 followed the Democrats' sweep of the Nov. 3 midterm elections, in which they won majorities in both the Senate and the House of Representatives. Investors sold tech shares amid speculation that congressional Democrats would tighten rules governing artificial intelligence and data-center construction, according to Bloomberg Markets Wrap, carried by SWI swissinfo.ch, and Yahoo Finance/Stocktwits.
Those concerns also had a state-level dimension. In Texas, newly elected Governor-elect Gina Hinojosa called for an immediate moratorium on new data-center construction, adding to local worries that fed the selloff, Yahoo Finance/Stocktwits reported. Meta President Dina Powell McCormick said beginning new data-center build-outs in the United States after the election would be "very challenging," according to Business Insider. Her remarks added to investor anxiety.
Politics was not the only pressure on chip shares: disappointing earnings outlooks from Qualcomm and Arm Holdings also contributed to Thursday's losses, Bloomberg Markets Wrap reported.
Nasdaq 100 loses a record $2.3 trillion in value
The Nasdaq 100's 6.4% decline on Thursday was its largest daily loss since March 2020. It erased $2.3 trillion in market value, a record one-day amount, according to Bloomberg Markets Wrap. The broader S&P 500 had its worst session since April 2025, dpa-AFX reported.
By the end of the session, the Nasdaq 100 was 14% below its latest high and officially in correction territory, Business Insider reported. During trading, it also fell below its 200-day moving average.
Semiconductor shares suffered particularly sharp losses. The PHLX Semiconductor Sector index, known as the SOX, dropped 12.2% to close at 9,011.14, according to The Financial News. It was the index's biggest one-day decline since March 16, 2020, and its lowest close in about seven months. The closing level was 38.4% below its June 22, 2026 high of 14,634.72.
Nvidia fell 9.3%, losing about $447 billion in market value. Other declines included 17.3% for AMD, 17.5% for Micron and 10.4% for Broadcom. SanDisk dropped 22.3%, Western Digital lost 17.4%, and SK Hynix's American depositary receipt fell 13.4%, The Financial News reported.
Amid the deepening rout, investor Michael Burry said he sold 25% of his put positions in the $58 billion VanEck Semiconductor ETF, or SMH. He said his remaining positions were still very large, according to Bloomberg Markets Wrap.
Asian losses trigger a trading halt in South Korea
The selloff continued across Asian markets on Friday morning. Japan's Nikkei 225 fell more than 6%, returning to levels seen in April, dpa-AFX reported. Chipmaker Rohm was the biggest decliner, with its shares down 17%.
South Korea's technology-heavy market also suffered steep losses, with Samsung Electronics and SK Hynix among the main sources of pressure. The Kospi opened down 2.2% at 5,263.63, according to The Korea Herald. As losses deepened, a first-stage circuit breaker triggered a 20-minute trading halt just three minutes into the regular session.
Samsung Electronics was down 9.98% and SK Hynix 11.71% in intraday trading. Before the regular session, their shares had fallen as much as 13% and 15.3%, respectively.
