Ibex 35 slips as AI sell-off after Democratic midterm win hits global markets

Wall Street sell-off and AI doubts

On Thursday, 5 November, the Nasdaq closed down 5.52%, its worst close of the year, while the Dow Jones fell 3.44% and the S&P 500 lost 4.36%. Investors reacted to the Democratic victory in the US midterm elections, which raised fears that the party would restrict the construction and expansion of data centres that underpin AI growth. Nvidia, one of the main makers of AI processors, lost more than 9% and shed more than 400 billion dollars in market value, while Micron dropped more than 17%. Spanish press reports put the Nasdaq's decline at about 2.5 trillion dollars of erased market capitalisation. Doubts about AI company valuations, the cost of building the technology and the returns on that spending also weighed on sentiment.

Europe and Asia follow Wall Street lower

European exchanges opened lower on Friday, 6 November, with London down 1.42%, Milan 1.41%, Frankfurt 1.35%, Paris 1.22% and Madrid 1.16% at the open. In Asia, Japan's Nikkei closed down 5.96%, falling below 60,000 points for the first time in five months, while South Korea's Kospi closed down 6.02% after dropping more than 8% early in the session. Shanghai lost 1.1%, Hong Kong 1.3% and Shenzhen 2.57%, the most exposed to technology of the three. The Asian sell-off followed fears of stricter US regulation that could slow AI development. The DAX led European declines with a retreat of nearly 2%, weighed down by weakness in the car industry.

Kospi (Seoul)-6.02%

Nikkei (Tokyo)-5.96%

Shenzhen-2.57%

Hong Kong-1.3%

Shanghai-1.1%

Kospi (Seoul)

-6.02 %

Nikkei (Tokyo)

-5.96 %

Shenzhen

-2.57 %

Hong Kong

-1.3 %

Shanghai

-1.1 %

Data from the article text

Ibex 35 falls, then cushions the blow

Madrid's Ibex 35 opened down 1.18% at 19,256.40 points, with every component in negative territory at the first moment of trading. At midday it had fallen 1.32% to around 19,225 points. IAG, which reported profit after tax of 2,264 million euros from January to September, 16.2% less than a year earlier, was among the weakest stocks at the open. It later turned positive and finished higher, and the airline raised its dividend by 10.3%. Solaria and Acciona Energia rose more than 4% as a US Congress with a Democratic majority was seen as more favourable to green investment, although the gain was described as contagion rather than a direct benefit to their business. Acerinox and Fluidra were the biggest decliners, down 2.6% and 1.54%. The index closed down 0.6%, yet it still recorded its best week since April.

Opening19,256.4

Midday19,225

Opening

19256.4 points

Midday

19225 points

Data from the article text

Oil, Iran and the cost of fuel

Brent crude traded near 97.7 dollars a barrel at midday, up 0.65%, while WTI rose 0.36% to 90.17 dollars. Iran's Revolutionary Guard said two more tankers had been hit by naval mines in the Strait of Hormuz while attempting an unauthorised route, and both had stopped after fires broke out on board. US President Donald Trump said Iran would need 25 years to rebuild after the offensive launched in February by the United States and Israel, and that he would soon decide whether to destroy the rest of the country. Qatar's emir, Tamim bin Hamad Al Thani, urged diplomacy and an end to further escalation. Higher fuel costs and operational disruption from the Middle East conflict weighed on airlines, and Amadeus reported net profit of 1,081.6 million euros for the first nine months of 2026, down 0.6%.

Jobs data and the concerns behind the sell-off

US nonfarm payrolls rose by 165,000 against an expected 70,000, and the previous month was revised up to 60,000 from 29,000. Stronger-than-forecast wage growth reinforced expectations of Federal Reserve rate rises, according to La Razon. Commentary in the Spanish press listed three concerns behind the AI sell-off: high debt levels, circular financing in which more than half of AI company investment reportedly comes from other industry firms, and profit potential that has yet to be proven. The Ibex 35 still ended the week with a 3.84% gain over five days, its best run since April.