A Democratic midterm sweep sparked fears of tighter AI and data-center rules, sending the Nasdaq to its worst day since April 2025.

Global markets reeled on Friday after a brutal tech selloff on Wall Street. According to Reuters, the Nasdaq sank 5.5% on Thursday and about $3 trillion was wiped from S&P 500 companies, the steepest US equity drop since the "Liberation Day" tariff rout of April 2025.

Investors fretted that Democrats' midterm gains could slow AI infrastructure build-outs and tighten scrutiny of data centers — hitting a trade already wobbling over returns on massive AI spending. The Japan Times, citing Reuters, said the Nasdaq alone shed roughly $2.5 trillion in market value in the session.

Asia followed hard. Japan's Nikkei slumped as much as 7% at the open, while South Korea and Taiwan benchmarks fell more than 8% before some dip-buying emerged. Samsung Electronics and SK Hynix dropped nearly 10% and 12%, TSMC as much as 8.5%, SoftBank Group about 11%, and Japan's Kioxia roughly 14%. The Philadelphia Semiconductor Index plunged 12.2% overnight, and the Nasdaq is now about 12% below its record close from a month earlier.

Safe-haven flows lifted bonds and the yen. The US 10-year Treasury yield hovered near 4.84%, close to its lowest since early September, as traders dialed back rate-hike bets ahead of Friday's payrolls report.

Why it matters

The AI boom that powered markets for years just hit its sharpest political and valuation stress test yet. How Congress treats data centers — and whether chip and cloud giants keep spending — will set the tone for global stocks into year-end.