Asia and US tech stocks tumble as AI selloff deepens

November 6, 2026 Priya Shah – Business Editor Business

A rout in Asia’s tech-heavy markets deepened on Friday as fear of increased regulatory scrutiny and a slowdown in AI build-out precipitated the steepest decline in US stocks since the tariff-triggered Liberation Day selloff in April 2025. Wall Street’s volatility fear gauge soared, the Nasdaq sank 5.5 percent, and $3 trillion was wiped off S&P 500 firms.

Japan’s Nikkei slumped 7 percent immediately after the opening bell. Benchmark share price indices in South Korea and Taiwan dropped more than 8 percent.

Massive sell-off of tech stocks comes just days after midterm elections

Stocks across the region then appeared to stabilise as dip buyers emerged. European stock futures also cut initial losses and traded down 0.6 percent, while Nasdaq futures climbed 1.4 percent against a backdrop of fragile sentiment.

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Investors worried that Democrats, who dominated midterm elections this week, will apply brakes to the artificial intelligence boom. Political jitters hit an AI trade already on shaky footing due to worry about returns on companies’ enormous investment in related infrastructure.

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Charu Chanana, chief investment strategist at Saxo, noted that panic drove the activity. When investors begin unwinding positions simultaneously, the selling becomes self-reinforcing, particularly if borrowed money and forced liquidations are involved.

The meltdown spooked retail investors and hedge funds alike. Policymakers and regulators scrambled to stem the selling as AI chipmakers Samsung Electronics and SK Hynix fell nearly 10 percent and 12 percent respectively in South Korea.

Wall Street Tech Sell-Off Triggers Asian Market Plunge Amid US Midterm Concerns

Kioxia plunged 14 percent in Japan and TSMC fell as much as 8.5 percent in Taiwan. AI investor SoftBank Group slid 11 percent, pushing the cost of insuring against the Japanese firm defaulting on debt to its highest in four years.

Data Centre Opposition Drives Semiconductor and Neocloud Market Losses

Dong Baozhen, chairman of asset manager Lingtong Shengtai, stated that the selloff shows stock prices had been built on rosy illusions about the future. Michael McCarthy, chief executive for Australia and New Zealand at brokerage Moomoo, pointed to a real shift in sentiment as markets factored in increased local opposition to data centres.

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Neocloud firm CoreWeave slumped 10 percent, with its five-year credit default swap spreads widening to a record level. The Philadelphia Semiconductor Index dropped 12.2 percent overnight, leaving the Nasdaq down 12 percent from its record close a month ago.

Some analysts argued the selloff was overdone. Allen Huang, a vice president of Mega Financial Holding’s equities trading department, suggested the market approached a final stage of capitulation amid the liquidation of margin accounts.

Flight to Safety in Bonds and Yen

Bonds gained across Asia as US Treasuries alongside government bonds in Japan and China rose. The US dollar slipped against haven currencies such as the yen and Swiss franc.

The yield on the benchmark US 10-year Treasury note hovered at 4.838 percent, near its lowest level since September 9. The 10-year Japanese government bond yield dropped as much as 9 basis points to 1.795 percent, marking its lowest point since June 30.

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