AI Sell-Off Wipes Out Wall Street's Post-Election Rally; Asian Markets Plunge
Global markets plunge as AI data centre investment fears trigger a massive sell-off on Wall Street and across Asia.
The global financial landscape has been shaken by a massive AI sell-off global markets event, which effectively erased the gains made during Wall Street's brief post-election euphoria. What began as a celebratory rally quickly turned into a rout as investors grew anxious over the future of artificial intelligence infrastructure and data centre investments in the United States.
Wall Street’s Dramatic Reversal
Just a day after the Dow Jones surged over 1,500 points in its best session since April 2025, the tide turned violently. On Thursday, all three major US indices suffered their worst single-day losses since April 2025, completely neutralizing the optimism surrounding the Democratic Party's victory in both chambers of Congress and key gubernatorial races.
- Nasdaq Composite: Plunged 5.52 per cent to close at 24,315.00, officially entering correction territory after dropping more than 10 per cent from its previous record high.
- S&P 500: Declined 4.36 per cent, settling at 7,353.73.
- Dow Jones Industrial Average: Shed 1,833.06 points (3.44 per cent) to close at 51,523.06.
The AI Fear Factor: Data Centres and Semiconductors
The catalyst for this crash was a sudden shift in sentiment regarding the US data centre industry. Investors are now concerned that the Democratic Party's legislative control could potentially slow the expansion of the very infrastructure that powers the AI revolution.
This fear hit the semiconductor and hardware sectors the hardest. The iShares Semiconductor ETF (SOXX) plummeted more than 12 per cent, its worst day since the onset of the Covid-19 pandemic in March 2020. Individual company losses were staggering:
- Broadcom: Shares fell 10 per cent.
- Nvidia: Declined 9 per cent.
- Qualcomm: Dropped 9 per cent, despite beating earnings estimates, due to a weaker-than-expected future outlook.
- Oracle: Slumped nearly 7 per cent.
The "neocloud" segment was equally devastated, with CoreWeave losing almost 10 per cent, while Nebius and Iren saw steeper declines of approximately 15 per cent and 17 per cent, respectively.
Contagion Beyond Technology
While AI was the epicenter, the panic spread to other industrial and financial giants. Caterpillar saw its shares drop 6 per cent, and financial powerhouse JPMorgan fell 4 per cent. Consumer and aerospace giants Nike and Boeing both experienced a 2 per cent pullback.
Asian Markets Feel the Shockwaves
The carnage continued into Friday as Asian markets opened with deep losses, mirroring the pessimism from New York. The impact was most severe in tech-heavy regions:
- Taiwan: The weighted index crashed 8 per cent to 38,300.
- South Korea: The KOSPI index fell over 7 per cent to 5,035.
- Japan: The Nikkei 225 dropped 5.95 per cent to 57,445.
- Singapore: The Straits Times index dipped 2.20 per cent to 5,180.
The Hang Seng index in Hong Kong also traded lower during early sessions, confirming a global trend of risk aversion.
Current Market Outlook
Despite the equity bloodbath, some commodities showed resilience, with Brent crude oil prices rising by 1.37 per cent. However, the overall sentiment remains bleak, with Dow Jones futures trading down 0.59 per cent, suggesting that the market is still grappling with the risks facing the technology and semiconductor sectors in the wake of the US election results.