Global Tech Stocks Plunge Amid AI Regulatory Fears Following US Midterm Elections

Global stock markets suffered sharp declines as a major technology sell-off originating on Wall Street spread across international exchanges. Trillions of dollars in market value were erased from major technology firms following the United States midterm elections, where Democratic candidates secured control of both the Senate and the House of Representatives for the remainder of President Donald Trump's term.

The downturn was driven by investor anxiety over potential stricter regulation of artificial intelligence and opposition from Democratic lawmakers toward the data centres required to power the technology. Wealth Club chief investment strategist Susannah Streeter noted that datacentre expansion appears set to slow down, threatening the spending spree underpinning the industry boom while investors grow increasingly anxious about returns on massive investments.

On Thursday, the tech-heavy Nasdaq share index experienced its worst day in 19 months, slumping 5.5% and shedding an estimated $2.5 trillion in market value. Semiconductor and chip-making companies led the losses, with Nvidia shares sliding over 9%, while AMD, Micron, SanDisk, and Western Digital recorded drops ranging from 17% to 22%. Major firms including Apple and Tesla also experienced heavy reductions.

The market turbulence extended to companies associated with Elon Musk, whose firms SpaceX and Tesla plunged 8% and nearly 11% respectively, losing more than $300 billion in combined market value. Musk had reportedly contributed nearly $450 million to back Republican campaigns during the election cycle.

The sell-off rapidly impacted international markets on Friday. In Europe, London's FTSE 100 index fell 1.5%, Germany's Dax dropped 1.5%, France's Cac 40 fell 1.2%, and Spain's Ibex declined 1.1%. European technology and semiconductor manufacturers such as Infineon and ASML also registered significant losses.

Asian markets followed suit during Friday trading sessions. Japan's Nikkei 225 index closed 6% lower, while South Korea's Kospi index finished down 6%, driven by sharp declines in major memory chip makers including SK Hynix, Samsung, Kioxia, and Tokyo Electron. Despite the substantial single-day losses, analysts pointed out that many major indices remain positive in their overall performance for the year 2026.