Asian markets plunge as AI-linked stocks slide after Wall Street rout

By Marcus Bennett

South Korea's KOSPI fell more than 8% on Friday, triggering a temporary trading halt before trading resumed with the index about 7% lower, Reuters reported.

Fox Business reported that the Asian decline followed Thursday's Wall Street sell-off, with major indexes in Japan, South Korea, and Taiwan sharply lower. U.S. stock futures pointed in opposite directions, leaving the immediate outlook for technology shares unsettled after three major U.S. benchmarks fell.

The losses matter because they reached chipmakers and companies tied to the artificial intelligence (AI) boom rather than remaining confined to broad equity indexes. Fox Business said investors were weighing tighter AI regulation and possible restrictions on data-center development after Democrats won both chambers of Congress.

The report identified no individual investors, proposed legislation, or specific rules behind those concerns. It therefore documents a reaction to election outcomes, not an enacted policy change. That distinction carries weight because investors were already weighing the political result's potential effect.

How far did the sell-off reach?

Fox Business reported the following regional index and company moves:

• Japan's tech-heavy Nikkei fell roughly 6%, putting it on track for its worst day in eight months.
• Taiwan's benchmark stock index dropped more than 8%, with technology and semiconductor companies facing heavy selling pressure.
• South Korean technology giant Samsung Electronics fell nearly 10%.
• Memory chipmaker SK Hynix dropped 11.7%.
• Taiwan Semiconductor Manufacturing Company (TSMC) declined 8.5%.
• Japanese technology investor SoftBank Group sank approximately 11%.

The largest named company decline was SK Hynix's 11.7%, followed by SoftBank Group's approximately 11%. TSMC lost 8.5%, while Samsung Electronics fell nearly 10%. Fox Business described the pressure as particularly severe among Asian chipmakers and companies tied to the AI boom.

Both South Korea's KOSPI and Taiwan's benchmark moved more than 8%, compared with roughly 6% for the Nikkei. Fox Business's figures make technology-linked shares the clearest concentration in the regional decline, with SK Hynix and SoftBank Group each losing about 11%.

Using the report's approximate percentages, the KOSPI's loss before the halt exceeded the Nikkei decline by more than 2 percentage points. Taiwan's benchmark also sat at least 2 percentage points above the Nikkei. Those are directional comparisons rather than exact basis-point calculations because Fox Business rounded the moves.

What changed on Wall Street?

The losses followed a sharp Thursday Wall Street session, when the Dow Jones Industrial Average fell 1,833 points, or 3.44%, and the S&P 500 declined 4.36%. The Nasdaq Composite dropped 5.52%, extending the sell-off across the three major U.S. gauges Fox Business tracked.

That more-than-10% decline from its October record high placed the Nasdaq Composite in correction territory, the market label for a pullback exceeding 10% from a recent peak. Fox Business did not provide the October peak value or exact closing levels, so it did not quantify the full drawdown beyond that threshold.

The Nasdaq's 5.52% loss exceeded the S&P 500's 4.36% fall by 1.16 percentage points and the Dow's 3.44% drop by 2.08 points. Fox Business's figures put the sharpest reported U.S. percentage loss on the Nasdaq, which carried its 5.52% decline into Friday.

Nasdaq futures climbed approximately 1.3%. Dow futures fell 0.71%. U.S. stock futures—contracts indicating expected prices before the regular session—were therefore mixed, suggesting a possible technology-stock rebound after Thursday's steep declines without signaling a uniform market recovery.

Why did AI policy enter the market?

Some investors have been weighing the potential effect of Democrats' sweeping midterm election victories, which gave the party control of both chambers of Congress, Fox Business reported. The results raised concern among some investors about increased regulation of AI companies and potential restrictions on data-center development.

For AI companies, the policy concerns were specific in kind but undefined in detail: regulation of the companies themselves and restrictions on data-center development. For chipmakers and technology investors, Friday's price moves showed that election outcomes could affect sentiment toward AI-linked businesses before any measure was detailed.

Fox Business named no individual investors raising the concerns and supplied no bill or regulatory proposal. The available evidence therefore supports an immediate market response to political uncertainty, not a measured reaction to an enacted AI rule.

President Donald Trump blamed the Democrats' midterm victories for Thursday's stock-market plunge, according to Fox Business. He also warned that Americans' retirement savings had suffered losses, placing the political consequences of the decline in personal financial terms.

On Truth Social, Trump wrote: "The Stock Market suffered one of the Worst Days in History based on the results of the Election," according to Fox Business's account of the post.

Trump also expressed confidence that the market would rebound, declaring that the country would soon be "BIGGER AND STRONGER THAN EVER BEFORE." The wording supplied his forecast, not evidence of a recovery; at the time of the report, Nasdaq and Dow futures still pointed in opposite directions.

The posts placed immediate blame on election outcomes while forecasting a reversal. That pairing matters for the market narrative because the futures response was split: a roughly 1.3% Nasdaq gain implied a possible technology recovery, while a 0.71% Dow decline indicated broader caution.

What does Friday's trading show?

Fox Business reported that Friday's regional trading extended rather than reversed Thursday's shock. Trading resumed. The KOSPI remained about 7% lower, the Nikkei was roughly 6% lower, and Taiwan's benchmark stayed above 8%.

Reuters said the temporary pause aimed to prevent further market volatility. It interrupted the KOSPI's descent without erasing the session's loss, a distinction that matters when comparing the initial 8% figure with the roughly 7% level after trading resumed.

The stock-level figures showed where the pressure concentrated. SK Hynix lost 11.7%, SoftBank Group approximately 11%, Samsung Electronics nearly 10%, and TSMC 8.5%. Fox Business tied the severity to Asian chipmakers and companies linked to the AI boom, making the sell-off a direct test of investor sentiment toward AI-linked assets.

The next market test is whether the Nasdaq's approximately 1.3% futures gain can hold while Friday's Asian semiconductor losses weigh on sentiment. The opposing Nasdaq and Dow futures moves leave the immediate direction unsettled, even as Trump predicts a rebound.