Asia stocks tumble after AI rout rocks US markets
QQQ•Asian stocks slumped as concerns that a Democratic victory in US midterm elections could bring more AI regulation compounded worries about returns on AI investment. South Korean and Taiwanese shares fell more than 8% at one point, while $3 trillion was wiped off S&P 500 firms.
1. Asian shares plunge
A global technology-stock selloff deepened on Friday, sending investors toward bonds. Japan’s Nikkei fell 6%, while South Korean and Taiwanese benchmark indexes dropped more than 8% after the opening bell before recovering some losses.
2. AI concerns weigh
Investors feared the Democratic election win could increase regulatory scrutiny of AI and slow its build-out, adding to concerns about returns on companies’ large AI infrastructure investments. The Nasdaq sank 5.5%, and $3 trillion was wiped off S&P 500 firms. Samsung Electronics and SK Hynix fell nearly 10% and 12%, respectively, while Taiwan’s TSMC fell as much as 8.5%.
3. Bonds gain favour
Asian government bonds rose, and the US dollar slipped against the yen and Swiss franc. The US 10-year Treasury yield stood at 4.838%, near its lowest level since September 9. South Korea and Taiwan authorities took steps to support markets, and Taiwan shares closed down 4.5%.
