Global stock markets suffered heavy losses as concerns over tighter artificial intelligence regulations in the United States triggered a broad sell-off in technology shares, wiping more than $3 trillion off Wall Street’s market value.
US markets recorded their worst session in months on Thursday, with the Nasdaq falling 5.52%, the S&P 500 dropping 4.35% and the Dow Jones losing 3.44%. The technology-heavy Nasdaq suffered its steepest one-day percentage decline since April 2025, as investors moved away from AI-related stocks, including major semiconductor companies such as Nvidia.
The sell-off followed the Democrats’ sweeping victory in the US midterm elections, which fuelled expectations of stricter oversight of the AI industry. Investors are particularly concerned that tighter rules governing data centre construction could slow infrastructure projects and weigh on investment across the sector.
The downturn spread across Asian markets on Friday. South Korea’s Kospi fell sharply, triggering a 20-minute trading suspension after losses exceeded 8%, before recovering some ground. Japan’s Nikkei also dropped nearly 6%, while Hong Kong, Shanghai and Shenzhen recorded smaller declines. Sydney proved more resilient, limiting its losses to around 0.5%.
European markets followed the downward trend, opening sharply lower as investors reacted to the losses in the US and Asia. Milan’s FTSE MIB fell around 1.3% in early trading, while Frankfurt’s DAX and Paris’s CAC 40 also posted significant declines. London’s FTSE 100 and Madrid’s IBEX were similarly in negative territory.
The pressure on technology stocks has also spread to broader sectors, suggesting that concerns over the AI investment outlook are weighing on market sentiment beyond companies directly involved in data centres and semiconductors.
The latest losses mark a sharp reversal in market optimism following the US midterm elections, with investors increasingly focused on the potential impact of regulatory changes on the future growth of the AI industry.
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