At a Glance
- S&P 500 lost $3 trillion; Nasdaq fell 5.5%
- Nikkei dropped 7% at the open; Kospi and Taiwan fell more than 8%
- Dip buyers then steadied Asian markets
- Treasuries, the yen and the Swiss franc drew buyers
Wall Street’s AI sell-off hit Asia hard on Friday, then dip buyers stepped in.
Fear of tighter AI rules after the Democratic midterm win shook US stocks on Thursday. Asia took the next hit.
Key Details
The Nasdaq fell 5.5%, its steepest drop since the “Liberation Day” sell-off in April 2025. It now sits 12% below its record close a month ago. The Nasdaq 100 lost 6.4%, or $2.5 trillion, and the Philadelphia chip index slid 12.2%. Investors worry Democrats will slow the AI build-out.
Market Reaction
- Samsung fell nearly 10%, SK Hynix 12%
- Kioxia dropped 14%, TSMC as much as 8.5%
- SoftBank slid 11%, and the cost of insuring its debt hit a four-year high
- CoreWeave lost 10%, with its credit default swap spreads at a record
- European futures were down 0.6%, Nasdaq futures up 1.4%
Why It Matters
Charu Chanana of Saxo saw panic in the selling, and said crowded positions made the moves sharper. Money headed for safety. The US 10-year Treasury yield sat at 4.838%, near its lowest since September 9, and Japan’s 10-year yield fell to 1.795%.
What to Watch Next
Some analysts think the worst may be close. Allen Huang of Mega Financial pointed to margin liquidations and said we may be in the final stage of capitulation. TSMC briefly hit its daily limit down. Sentiment is still fragile.
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Source: Reuters
