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Wall Street's midterm rally lasted less than a day. On Thursday, 5 November, the Nasdaq Composite closed down 5.52% at 24,315 — wiping an estimated $2.5 trillion off the index, according to Dow Jones data — while the Dow Jones Industrial Average fell 3.44% to 51,523. On Friday, the rout went global: Japan's Nikkei closed down about 6% at 57,434.77, its steepest daily fall since April 2025, and markets across Asia followed it down.
The selling is not a mystery. It has two engines, and both were running before the election. The first is doubt about the artificial-intelligence boom itself: companies have borrowed and spent vast sums on data centres and chips, and investors are increasingly asking when that spending turns into profit. The second is politics: Democrats campaigned across the country on slowing the growth of data centres, dozens of local ballot measures aimed at restricting them, and Texas governor-elect Gina Hinojosa pledged a moratorium on new construction. Investors are now pricing in a slower AI buildout.
How bad is it in Asia?
Friday's session was brutal. The Nikkei lost 9.3% over the week — its worst weekly performance since March 2020 — and has now fallen more than 20% from its June peak, putting it in bear-market territory. Memory-chip maker Kioxia plunged almost 11.5%, rival Tokyo Electron slipped 5.8%, and SoftBank slid 11%.
South Korea and Taiwan fell more than 8% soon after opening, before cutting losses. Samsung Electronics and SK Hynix fell nearly 10% and 12% respectively in South Korea; Taiwan's index closed down 4.5%, capping a 12.2% weekly decline — its biggest since 1991 — with chip giant TSMC down 4.7%. In the United States, the Philadelphia Semiconductor Index had already plunged 12.2% on Thursday.
The chip stocks leading the fall
The damage is concentrated exactly where the AI trade was hottest. Nvidia, the face of the AI boom, fell 9.3% on Thursday, knocking more than $400 billion off its market value; AMD tumbled 17.3% and Qualcomm slid 9.5%. Tesla fell nearly 11% and SpaceX about 8% — a further slide for Elon Musk's companies, which had already lost hundreds of billions in market value over the previous two days.
The fear gauge tells the same story: the Cboe Volatility Index surged 50% to a seven-month high. And the anxiety is spreading beyond share prices — AI cloud provider CoreWeave slumped 10% on Thursday, while the cost of insuring its debt against default hit a record.
Is this a correction or something bigger?
The Nasdaq is now more than 10% below its record close of 6 October — the textbook definition of a correction — and the S&P 500's companies lost about $3 trillion in market value on Thursday. A correction is a normal feature of bull markets, not a crash in the historic sense. But corrections test which stories investors believe, and the AI buildout story had survived every test of 2026 until this week.
There is even a possible silver lining, as analysts quoted in market reports have noted: a pause in aggressive data-centre construction could reduce the risk of overbuilding. For now, though, the direction is one way. Wednesday's rally said the election result was good for markets; Thursday and Friday said the AI boom is being re-priced. The next few sessions — and Friday's October jobs report — will show which verdict holds.
Sources: Financial Express (BBC), TRT World. Internal: Nasdaq Crashes Into Correction as Dow Drops 1,200 Points, Elon Musk's Companies Lost $456 Billion in Two Days.