Asian stock markets plunged Friday after a widespread selloff in artificial intelligence-related shares dragged down Wall Street.
Japan's benchmark Nikkei 225 dropped 6.1% to 57,332.92, falling below the 60,000-point mark for the first time in nearly six months. Technology stocks, including SoftBank Group Corp. and Advantest Corp., recorded some of the steepest losses.
Australia's S&P/ASX 200 declined 0.5% to 9,020.80, while South Korea's Kospi plunged 6.3% to 5,042.65 as shares of Samsung Electronics and SK Hynix tumbled. Hong Kong's Hang Seng Index fell 0.9% to 24,567.97, and the Shanghai Composite Index lost 1.1% to 3,648.94.
Global markets have come under pressure as shares of companies that benefited from the artificial intelligence boom continue to slide. Investors have grown concerned that rising borrowing costs could slow the construction of AI data centres. Critics also warn that valuations of AI-related stocks have become excessively high, raising fears of a market bubble.
Shares of Toyota Motor Corp. also fell sharply after the Japanese automaker reported weaker-than-expected profits on Thursday.
On Wall Street, the S&P 500 plunged 4.4% on Thursday, marking its worst single-day performance since US President Donald Trump's "Liberation Day" tariff announcement rattled global markets in April 2025. The decline wiped out more than the previous day's gains, which had been the index's strongest in three months.
The Dow Jones Industrial Average dropped 1,833 points, or 3.4%, while the Nasdaq composite tumbled 5.5%. The technology-heavy Nasdaq has fallen 11.9% from its record high set last month, entering what market analysts describe as a correction, generally defined as a decline of more than 10%.
The US midterm elections on Tuesday have added to market concerns. Democratic victories across the country have raised the possibility of government restrictions or delays on new data centre construction. Voters from both major political parties have expressed concerns about artificial intelligence and rising electricity bills associated with data centres.
A slowdown in data centre development could reduce demand for AI chips, electricity and other goods and services that have benefited from the rapid expansion of the AI industry, which has become a major driver of US economic growth.
Nvidia, the leading chipmaker widely regarded as the symbol of the AI boom, fell 9.3%, making it the biggest contributor to the S&P 500's decline. The company's shares are now down 2.6% so far this year, following gains of approximately 39%, 171% and 239% over the previous three years.
Advanced Micro Devices plunged 17.3%, while cloud-based AI chip rental company CoreWeave lost 9.8%. GE Vernova, which supplies power-related equipment and services for data centres, dropped 7.5%.
The losses have had an outsized impact on Wall Street because AI chipmakers have become some of the market's largest companies. For instance, a 1% movement in Nvidia shares has a greater influence on the S&P 500 than a similar movement in almost any other US-listed stock.
Over the longer term, stock prices are generally driven more by corporate earnings and interest rates than by political control in Washington.
In the bond market, US Treasury yields continued to decline Thursday. The yield on the 10-year Treasury fell to 4.84% from 4.90% late Wednesday. It stood at 4.95% on election night and above 5.30% last month. The decline may indicate that investors are shifting towards safer US government bonds amid falling stock prices.
The drop in yields came despite positive economic indicators, including a decline in the number of US workers filing for unemployment benefits last week.
In early trading Friday, benchmark US crude oil prices rose 1.3% to $91.67 per barrel, while Brent crude, the international benchmark, gained 1.7% to $99.93 per barrel. Uncertainty remains over the course of the war with Iran and when the global energy industry might return to normal operations.
The US dollar strengthened to 157.93 Japanese yen from 157.68 yen. The euro traded at $1.1196, down from $1.1219.