AI Stock Sell-Off Wipes $2.5 Trillion From Global Markets

A global stock sell-off driven by AI-related uncertainty wiped approximately $2.5 trillion in market value from Wall Street and severely impacted Asian and European markets. The volatility followed a landslide victory for the Democratic Party in the U.S. midterm elections, sparking investor fears that the new congressional majority would implement stricter AI regulations and slow data center buildouts due to environmental and community concerns.

U.S. markets experienced their worst single session since April 2025 on Thursday, with the Nasdaq plunging 5.5% and entering correction territory. AI-linked stocks were hit hardest; Micron lost over 17%, while Nvidia Corporation and Intel fell more than 9% and 10%, respectively. The contagion spread to Asia, pushing Japan's Nikkei 225 into a bear market and triggering a trading halt on South Korea's Kospi, both of which closed down 6% on Friday.

Markets stabilized slightly on Friday following a U.S. jobs report showing 165,000 new jobs in October. While Nvidia Corporation and Space Exploration Technologies Corp. staged modest rebounds, the S&P 500 ended the week down roughly 2.7%. In response, investors began rotating capital away from semiconductor-heavy markets toward non-technology sectors and equities in India and China. Jim Cramer of the CNBC Investing Club announced a strategy to reduce exposure to data center stocks and increase cash holdings to over 15% to seek higher ground.