AI selloff sends Nasdaq down 5.5% and drags Asian tech shares lower

what happened

Reuters reports that Asian tech-heavy markets were set to fall on Friday after Wall Street suffered its sharpest drop since the tariff-driven 'Liberation Day' sell-off a year and a half earlier.

Investors fear that Democrats, who won control in the midterm elections this week, could tighten rules on AI development and slow spending on it.

The Nasdaq lost 5.5%, the Philadelphia Semiconductor Index collapsed 12.2%, and about $3 trillion was erased from S&P 500 members. South Korea's KOSPI fell more than 8%, which triggered a 20-minute trading halt, and Japan's Nikkei dropped 5%. Bonds were expected to rise in Asia, while the dollar weakened against the yen and Swiss franc.

why it matters

Producers of memory and semiconductor hardware are most exposed, since the sell-off reflects doubts about returns on huge AI spending and rising local resistance to new data centres. Analysts say markets have not fully priced in the costs borne by communities. Demand for safe-haven assets could support US government bonds.

market impact

US tech and Asian chipmakers: fears of AI regulation pressure their share prices lower

• ▼Nasdaq pressure down — selling in AI-linked tech shares on regulatory fears
• ▼Semiconductor stocks pressure down — doubts about returns on AI spending and local data centre opposition
• ▲US Treasuries pressure up — safe-haven demand as equities slide
• ▼US dollar pressure down — investors shifting into the yen and Swiss franc

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