Tech stocks sell off after Democratic midterm wins, Asian markets follow Wall Street lower

Wall Street's worst session in over a year

US stock markets had their worst session in more than a year on 5 November, with technology shares leading the sell-off. The S&P 500 fell 4.4% and the Nasdaq lost 5.5%, according to NRC, while Volkskrant puts the Nasdaq decline at 6.4%, its worst day since the pandemic. Both indices had their worst day since April 2025, when President Donald Trump announced import tariffs for many countries. Nvidia lost 9% and AMD 17%, and Qualcomm dropped about 9% shortly after the open despite a quarterly report that beat expectations on results.

Fears over AI data centers

Investors fear that Democrats, who won the midterm elections on 3 November by a wide margin, will restrict construction of the data centers that power the AI boom. Volkskrant reports that in two-thirds of local referendums on proposed data centers, a majority voted against them. UBS analysts estimate that 30% of the planned expansion of US data center capacity in 2028 may not go ahead, according to NRC. Erik Joly, chief economist at ABN Amro, described the first market reaction on VRT NWS radio.

“At first, financial markets reacted quite satisfied to the election result.”

Joly said the selling then hit technology and financial stocks hardest, while energy transition, infrastructure and pharmaceutical shares gained. Stefan Willems, an independent stock market journalist, pointed to an interview in which the new Texas governor said he would reconsider bringing AI data centers to the state, noting that Texas hosts the largest number of data centers still to be built. For small investors, Willems advised patience.

“Above all, don't let yourself be driven crazy.”

He said the moves had not been seen in six years, though such jolts are not unusual for equity markets.

Musk's fortune and his companies

Elon Musk lost 80 billion dollars on 5 November alone as shares of Tesla and SpaceX fell, Volkskrant reports, and Bloomberg puts his fortune at 785 billion dollars. Sources differ on the size of the drops: NRC gives 11% for Tesla and 9% for SpaceX on 5 November, while Volkskrant gives 11.5% and 8%. Over two trading days, NRC calculates that Tesla had lost 14% and SpaceX about 13%. Musk had spent nearly half a billion dollars supporting Republican candidates before the vote.

Asian markets follow

The Nikkei in Tokyo closed just under 6% lower in the latest session, according to De Standaard, and stands more than 20% below its June peak. Chip makers Advantest, Tokyo Electron and Kioxia fell as much as 10%. In Seoul the Kospi dropped 6%, and trading was briefly halted after an 8% fall, which automatically suspended transactions. Samsung and SK Hynix lost up to 9%, while Taiwan's TSMC shed almost 5% and the Taiex index fell 4.5%. Hong Kong and Shanghai losses stayed around 1%.

South Korean Finance Minister Lee Hyoung-il said after an emergency meeting with financial regulators and the central bank that the economy's fundamentals are solid. The government is ready to take extra measures if volatility increases further.

Europe, New York and what comes next

European markets fell less because they hold fewer technology companies, VRT NWS notes. On the morning of 6 November the EuroStoxx 50 was down about 1.5% around lunchtime and the AEX nearly 1.4%, yet ASML rose 3.3% as chip-related shares led a partial recovery. US futures pointed to a slight recovery, with S&P 500 futures up 0.2%, Nasdaq 100 futures up 1.3% and Nvidia futures 4.3% higher. New York markets open at 14:00 Warsaw time on 6 November. The Wall Street Journal reports that doubt has grown over Anthropic's planned stock market listing, which aimed to raise 100 billion dollars in the week before Thanksgiving (26 November) at a valuation of about 1,500 billion dollars.