Japan's Nikkei drops 3% as Democratic gains in US midterms hit AI stocks
EWJ•Japan's Nikkei fell 3.1% as AI-related shares slid on concerns that Democratic gains in the US midterm elections could bring stricter rules for data-centre projects and slow AI infrastructure spending. The Topix fell 1.85%.
1. AI shares lead decline
The Nikkei fell 3.1% to 61,127.9, while the broader Topix dropped 1.85%. Investors sold AI-linked stocks over concerns that Democratic gains in the US midterm elections could bring stricter regulation of AI infrastructure investment.
2. Technology stocks fall
Advantest fell 6.4%, Tokyo Electron dropped 5% and SoftBank Group slipped roughly 7%. Memory chip maker Kioxia fell 10%, while fibre-optic cable makers Fujikura and Furukawa Electric declined 8.2% and 9%, respectively.
3. Election concerns widen
The US election result could affect the AI data-centre buildout, fiscal outlook, defence spending and regulation in healthcare, banking and cryptocurrencies. Prediction markets signalled growing expectations of a Democratic sweep of Congress, with more than $1.48 billion wagered on the midterm elections. Of the Nikkei's 225 components, 130 fell and 95 rose.
