# Asian chip stocks follow the Nasdaq down as investors bet Democratic gains will slow data-center building

Japan's Nikkei closed almost 6% lower and in a bear market, South Korea's Kospi fell more than 8%, and Taiwan Semiconductor Manufacturing lost 9.6%, one day after the Nasdaq Composite dropped about 5.5%.

- Published: 2026-11-06T09:38:00.817Z
- Canonical: https://polylog.news/2026-11-06/asian-chip-stocks-follow-the-nasdaq-down-as-investors-bet-de
- Publisher: Polylog (Global desk)
- Section: markets
- Sources: [Al Jazeera](https://www.aljazeera.com/economy/2026/11/6/tech-stock-rout-driven-by-us-ai-fears-continues-in-asian-trading), [The Economist](https://www.economist.com/finance-and-economics/2026/11/05/markets-realise-they-hate-americas-blue-wave), [MercoPress](https://en.mercopress.com/2026/11/06/big-tech-loses-a-trillion-dollars-in-a-day-after-the-democratic-win?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001562306#utm_source=RSS)

The sell-off in artificial intelligence (AI) stocks that began in New York spread across Asia on Friday. Japan's Nikkei 225 [fell 3,643.13 points, or 5.96%, to 57,434.77](https://www.brecorder.com/news/40447670/japans-nikkei-tumbles-on-tech-rout). The close left it more than 20% below its June peak, which meets the standard definition of a bear market. South Korea's Kospi [fell more than 8% and triggered a circuit breaker](https://www.business-standard.com/markets/news/asian-markets-crash-as-ai-rout-rocks-us-markets-kospi-plunges-8-126110600087_1.html). In Tokyo, [SoftBank fell 11.6% and Kioxia 13%, and Taiwan Semiconductor Manufacturing Company (TSMC) dropped 9.6%](https://www.rte.ie/news/business/2026/1106/1598219-asia-stocks-tumble-after-ai-rout-rocks-us-markets/). [Al Jazeera](https://www.aljazeera.com/economy/2026/11/6/tech-stock-rout-driven-by-us-ai-fears-continues-in-asian-trading) attributed the losses to concern over US data-center expansion and AI regulation.

The losses in Asia followed Thursday's session in New York, when the Nasdaq Composite [fell about 5.5% into correction territory and lost roughly $2.5 trillion in market value](https://finance.yahoo.com/markets/stocks/articles/stocks-plunge-midterm-results-send-161247062.html). [NPR](https://www.npr.org/2026/11/05/nx-s1-6031987/stock-markets-ai-midterm-elections) put the loss closer to $2 trillion. According to CNBC figures cited by [Quartz](https://qz.com/nasdaq-correction-ai-chip-stocks-midterms-selloff-110526), the iShares Semiconductor exchange-traded fund (ETF) fell as much as 11%, its steepest one-day drop since March 2020. Broadcom, Nvidia and Oracle each lost about 6%. [MercoPress](https://en.mercopress.com/2026/11/06/big-tech-loses-a-trillion-dollars-in-a-day-after-the-democratic-win?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss) reported that the largest technology companies alone lost about a trillion dollars in a day.

Most coverage points to the same trigger. Democrats won the House, the Senate and several governorships on Tuesday. Texas Governor-elect Gina Hinojosa [campaigned on a temporary moratorium on data centers and on ending some tax incentives for building them](https://www.npr.org/2026/11/05/nx-s1-6031987/stock-markets-ai-midterm-elections). [The Economist](https://www.economist.com/finance-and-economics/2026/11/05/markets-realise-they-hate-americas-blue-wave) wrote that investors fear Democratic control will slow the AI boom. Voter anger over electricity bills turned data centers into a campaign issue. In Ohio, Democrat Sherrod Brown [ran ads calling his opponent a spokesman for data centers](https://tribune.com.pk/story/2626529/data-centre-backlash-scrambles-us-midterm-politics?amp=1).

The election explains the timing of the sell-off better than it explains its size. The selling began before the vote. Chinese financial outlet [Gelonghui](https://m.gelonghui.com/p/7033491) reported before polling day that CoreWeave shares had fallen 25.21% in a week. Data-center builders and power-equipment makers [dropped 20% or more on Wednesday](https://qz.com/nasdaq-correction-ai-chip-stocks-midterms-selloff-110526). President Donald Trump still holds a veto over federal legislation and [still calls the industry essential to competing with China](https://tribune.com.pk/story/2626529/data-centre-backlash-scrambles-us-midterm-politics?amp=1). The decisions that set the pace of construction, such as permits, grid connections and power tariffs, are made mostly by states and utility regulators. The vote raised the political cost of a capital-spending plan that was already priced for uninterrupted growth and was increasingly funded with debt.

Bonds rallied. The 10-year Treasury yield [fell to 4.83%, and the two-year yield fell to 4.52%](https://www.fxstreet.com/news/gold-rallies-above-4-100-as-nasdaq-100-crashes-december-hike-bets-fade-202611052023). The market-implied probability of a Federal Reserve rate increase in December fell from 82% to 66%. Some money moved toward domestic shares in other markets. In Tel Aviv, [Globes reported](https://www.globes.co.il/news/article.aspx?did=1001562306#utm_source=RSS) (in Hebrew) that the TA-35 and TA-90 indexes rose about 2% at the open, led by companies most exposed to Israel's domestic economy. The US October employment report is due at 13:30 UTC.

## What this means

The losses run through one channel. Chipmakers, memory makers and power-equipment suppliers were valued on the assumption that data-center construction would keep growing every year. Asian exporters such as TSMC, SoftBank and the Korean memory makers are the most exposed part of that chain, which is why Seoul and Taipei fell further than New York. Federal law changes slowly with a divided government and a presidential veto, so the new information is at the state level. Texas and other states can delay grid connections and cut subsidies, which pushes back the revenue suppliers expected to book in 2027. The consensus treats the election as the cause. The pre-vote declines suggest the bigger problem was valuations and debt-funded spending, and the vote simply gave holders a reason to sell. The precedent is the 2000 to 2002 telecom overbuild. When carriers cut capital spending, equipment suppliers such as Nortel and Lucent lost far more value than the carriers. The likelier outcome is that supplier and power-equipment shares stay under pressure for weeks, while large cloud companies hold their spending plans at least until fourth-quarter earnings in late January. That read depends on credit spreads on data-center debt continuing to widen. It would be proved wrong if the largest cloud companies reaffirm or raise their 2027 spending guidance and Texas lawmakers decline to take up a moratorium.

## What to watch

- Whether Microsoft, Alphabet, Amazon or Meta revise their 2027 capital-spending guidance. A cut would move the problem from share prices to supplier order books.
- Data-center bills when the Texas legislature convenes in January. A moratorium in the largest growth state would delay projects already financed.
- Foreign selling of Korean and Taiwanese shares in the coming week. Sustained outflows would show global funds cutting AI-hardware exposure rather than just trading the election.