More than $3 trillion was wiped off the US stock market in a single session, with technology and semiconductor companies among the hardest hit. The sell-off spread to Europe and Asia, as investors reassessed the prospects for companies that have benefited from the rapid expansion of AI infrastructure.
The S&P 500 fell 4.36%, while the Nasdaq 100 dropped 6.4%, marking its steepest daily decline since the market turmoil triggered by US tariff announcements in April 2025, the Financial Times reported. The Dow Jones Industrial Average also lost more than 1,800 points, falling 3.44%.
The pressure continued in Asian markets on Friday. Japan’s Nikkei 225 fell around 6%, while South Korea’s Kospi dropped sharply, prompting a temporary halt to trading after losses reached 8.5%, according to the Financial Times. Taiwan’s TAIEX also declined.
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Technology and chipmakers lead the losses
Companies linked to the AI boom bore the brunt of the sell-off. Nvidia shares fell more than 9%, while Micron and AMD each lost around 17%. SanDisk plunged 22%, according to figures reported by The Guardian.
The Independent also reported sharp declines among other major technology and AI-related companies, including Tesla and SpaceX, whose shares fell by 10.8% and 9%, respectively. Losses extended to European chip equipment makers, including ASML and BE Semiconductor.
The market reaction reflects concerns that a Democratic-controlled Congress could take a less favorable approach to the construction of data centers and the expansion of AI infrastructure. Several Democratic candidates campaigned against new data center projects, citing concerns over their impact on local communities and resources.
Investors fear that tighter regulations or more obstacles to project approvals could slow the construction of facilities needed to power AI systems, affecting demand for semiconductors, servers and other technology.
Political uncertainty meets existing concerns over AI
The election results have added to doubts that were already emerging over the scale and profitability of investment in AI.
Technology companies have committed enormous sums to data centers and computing infrastructure, driving strong demand for advanced chips. But investors have increasingly questioned whether the spending will generate returns quickly enough to justify the high valuations of companies benefiting from the boom.
The Financial Times quoted Charles-Henry Monchau, chief investment officer at Swiss private bank Syz Group, as saying investors feared that the peak of AI capital spending could already be behind them.
The Guardian also cited analysts who pointed to disappointing earnings from some of the largest US technology companies and signs that the pace of AI spending could be slowing.
The Independent, meanwhile, reported that analysts at Goldman Sachs attributed part of the sell-off to trading activity around the elections. Some asset managers had reduced their exposure before the vote, then bought shares after the unexpected results. The subsequent rise in prices encouraged some investors to take profits, contributing to a wider wave of selling.
The losses were not limited to technology stocks. Bitcoin also fell sharply, while concerns over the future direction of US policy weighed on other areas of the market.
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Markets remain volatile
Despite the sharp declines, some US stocks showed signs of recovery in pre-market trading on Friday, as investors began buying shares at lower prices. However, analysts warned that further volatility remained possible.
Oil prices also moved in response to the election outcome. The Financial Times reported that Brent crude had climbed back above $100 a barrel, while The Independent cited market expectations that a weakened President Donald Trump could be less inclined to escalate the conflict with Iran, potentially easing pressure on oil prices and inflation.
The latest sell-off has exposed the uncertainty surrounding the next phase of the AI boom. While the election results have raised questions about the industry’s regulatory environment, concerns over high valuations and the returns on massive investments were already weighing on investor sentiment.
