AI Stock Crash Wipes $3.2trln off Wall Street in One Day, Asia Follows

By Al Mayadeen English

Source: FT + WSJ + AFP

6 Nov 2026 12:11

US stocks lost $3.2tn in a day after the Democratic midterm win raised fears of AI data center curbs, and the selloff hit Asia and Europe on Friday.

US stocks lost $3.2 trillion on Thursday, with the Nasdaq 100 plunging 6.4% and the S&P 500 falling 4.4%, after investors concluded that the Democratic midterm victory could slow the artificial intelligence spending boom that carried Wall Street to record highs this year.

The selling crossed into Asia on Friday, pushing Japan and Taiwan into bear markets and triggering a trading halt in Seoul, while European shares also opened lower.

The $3.2 trillion drop on the S&P Composite 1500 was the biggest in dollar terms since the turn of the millennium, according to Financial Times calculations based on FactSet data. The percentage fall was smaller than in past crises such as 2008, because US stocks are now worth far more, but the S&P 500’s 4.4% loss was its worst session since last year’s “liberation day” tariff turmoil.

The Nasdaq Composite fell 5.5%, its sharpest daily percentage loss since April 2025, AFP reported. In dollar terms, the damage was without precedent, with the index shedding an estimated $2.49 trillion in market value, according to Dow Jones Market Data cited by the Wall Street Journal. The previous record was $1.87 trillion, set on June 5. The PHLX Semiconductor index had its worst day since the depths of the pandemic, and the selling dragged every sector of the S&P 500 into the red.

Chipmakers, Musk’s companies lead the fall

Nvidia, the company most closely tied to the AI surge, tumbled 9.3%, wiping more than $400 billion off its value and leaving the stock down for the year, the FT and the WSJ reported.

Micron lost 17%, Broadcom 10% and Qualcomm 9.5%, while memory makers SanDisk and Western Digital, among this year’s best performers, dropped 22% and 17%. The Magnificent Seven group of tech giants lost roughly $1 trillion in combined value, according to the WSJ.

The rout reached beyond technology. Caterpillar slid 6.4%, and Walmart fell 1.1%. Tesla dropped 10.8% and SpaceX 9.1%, extending losses from Wednesday, with both companies tied to Elon Musk’s Texas operations, including the planned Terafab chip plant.

Data-center fears meet a concentrated market

Investors dumped shares on fears that newly elected Democrats would restrain the data-center expansion that underpins AI spending.

Michigan’s senator-elect Abdul El-Sayed has called for a “full-on pause” in frontier AI development, and South Carolina’s incoming senator Annie Andrews has proposed a two-year ban on new data-center construction.

In Texas, which has more planned data-center projects than any other state, Democratic governor-elect Gina Hinojosa wants new approvals halted until the Legislature can pass protections next year, the WSJ reported.

JonesTrading’s chief market strategist Mike O’Rourke told WSJ that next year’s earnings forecasts “can no longer be trusted” because AI infrastructure companies, especially chipmakers, drive S&P 500 earnings growth.

The scale of the fall reflects how top-heavy the market has become. The ten largest companies, dominated by the technology giants at the center of the AI buildout, made up 40.8% of the S&P 500 as of May 18, according to JP Morgan Asset Management. That was up from 26.6% at the peak of the dot-com bubble, and the ten generated just over a third of the index’s earnings. A shock to the spending plans behind a handful of firms therefore moves the whole market.

Goldman Sachs estimated in April that AI-linked stocks accounted for nearly 45% of the S&P 500, up from about 25% in 2022.

Trump blames voters and Democrats

Trump blamed the Democrats for the crash in posts on Truth Social on Thursday evening. He wrote that the market fell because the “Dumocrats” had a big Tuesday and told voters they “only have yourselves to blame.”

He added that Americans’ 401(k) retirement accounts had dropped as a result, and promised that the United States would soon be “bigger and stronger than ever before.”

Rout spreads to Asia

Japan’s Nikkei 225 fell 6% on Friday, its worst day since Trump launched his trade war in April 2025, leaving it 20% below its June peak.

Taiwan’s Taiex, dominated by chipmaker TSMC, dropped 4.5% and is also 20% below its October peak, putting both markets in bear territory.

South Korea’s Kospi fell 6%, after diving as much as 8.5% in early trade, which triggered a circuit breaker that halted trading for 20 minutes, AFP reported.

Memory chip makers took the heaviest losses. SK Hynix slid 10.8% and Samsung Electronics 6.4%, while SoftBank Group, which holds roughly 13% of OpenAI, plunged 10.4%. In early trading, Tokyo Electron fell about 9% and Kioxia 13%.

“There’s nowhere to hide,” Lotus Asset Management’s chief investment officer Hao Hong told FT, adding that the correction was “far from finished.” Another Asia investment chief cited by FT said many investors were being forced out of their technology positions by risk limits.

Europe falls less

The Stoxx Europe 600 and the FTSE 100 both opened 1.5% lower on Friday, after the Stoxx index slipped only 0.4% on Thursday. Europe has little direct exposure to AI stocks, and ASML fell just 0.3% at the open, with the technology sub-index down under 1%.

The weakness spread further than technology, however. More than 90% of Stoxx 600 stocks were in the red in early trading, with retail and healthcare shares down around 2%.

Lombard Odier’s multi-asset portfolio manager Florian Ielpo said the AI de-rating had turned into a broad de-risking, raising the question of how long it would last.

US stock futures signaled a calmer start on Friday, with Nasdaq 100 contracts up 0.3% and S&P 500 contracts 0.4% lower. Whether the pause holds depends on how fast Democrats move on data-center curbs and how much of this year’s AI spending plans survive them.