Tech Stocks Fall After Democrats Win US Midterms
The technology-heavy Nasdaq Composite closed down more than 5.5% following Democratic victories in the US midterm elections that handed the party control of both the Senate and the House. The sell-off shed an estimated $2.5 trillion in market value, according to Dow Jones data cited by News.az. Nvidia shares slid more than 9% in New York trading, knocking more than $400bn off the firm’s market value.
Investors sold off tech shares amid concerns that the election results could slow the development of artificial intelligence. Democrats in races across the US campaigned to slow the growth of data centres and AI. During her campaign, Texas Democratic governor-elect Gina Hinojosa took a strong stance against data centres by promising to enact a moratorium on any new building initiatives within the industry.
US President Donald Trump addressed the market reaction. In a social media post reported by News.az, Trump blamed his political opponents for the downturn. The Stock Market suffered one of the Worst Days in History based on the results of the Election,
he wrote. Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!
Asian markets and chip manufacturers plunge in early trading
Asian markets recorded steep losses on Friday morning, led by sharp declines among computer chip and hardware manufacturers. Early trading saw the Nikkei 225 in Japan drop by 6%, accompanied by News.az reports showing a 12.6% plus decline for memory chip manufacturer Kioxia and a 9.5% drop for Tokyo Electron. In South Korea, the Kospi index plunged more than 8.5%, triggering a circuit breaker mechanism that temporarily suspends trading to prevent panic selling. South Korean chipmaker SK Hynix dropped more than 11.5%, while Samsung shares declined by nearly 10%.
The Taiex in Taiwan experienced a decline exceeding 8.3%, alongside a nearly 8.5% drop for the major chipmaker TSMC. During Thursday’s European trading session, chipmaker Infineon fell by more than 8.5% and tech equipment manufacturer ASML dropped by 6.5%, as reported by News.az.
Other semiconductor firms experienced heavy losses in New York trading. AMD and Micron both dropped by more than 17%, Intel fell 10.3%, and memory card maker SanDisk plunged more than 22%. The Philadelphia Semiconductor Index, which tracks 30 of the largest semiconductor companies, fell by more than 12%. Elon Musk’s companies SpaceX and Tesla also plunged, falling 8% and nearly 11% respectively, shaving more than $300bn off the firms’ market value on Thursday.
Frequently Asked Questions About the Tech Stock Sell-Off
Why did the US midterm election results impact global tech stocks?
Democratic victories in the Senate and House brought to power lawmakers who campaigned to slow the growth of data centres and AI. Investors reacted by selling off shares over concerns that the new political alignment could slow AI development and impact future returns on massive industry investments.
Which specific chipmakers suffered the heaviest losses during the trading session?
AMD and Micron both dropped by more than 17%, while Kioxia lost more than 12.6% in Japanese trading and SK Hynix fell more than 11.5% in South Korea. The Philadelphia Semiconductor Index declined by more than 12% overall.
What trading restrictions were triggered by the market downturn in Asia?
South Korea’s Kospi index plunged more than 8.5% on Friday morning, triggering a circuit breaker mechanism to temporarily suspend trading and prevent panic selling.
How much market value did the largest US technology companies lose?
The tech-heavy Nasdaq Composite shed an estimated $2.5 trillion in market value. Nvidia alone saw its shares slide more than 9%, knocking more than $400bn off the firm’s market value in New York trading.
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