US tech stock rout: is the AI bubble bursting? After Thursday's share price plunge on Wall Street, could the volatility be the start of a huge market meltdown? Global financial markets have been thrown into a tailspin as investors bet on an AI slowdown after the US midterm elections. This is not the first time stock markets have wobbled in recent months due to concerns over a tech bubble. But could this volatility be the start of a huge market meltdown?

Voters in 10 states backed data center restrictions, AI stocks plunged as Wall Street concerns mount, and Google expanded voluntary buyouts amid artificial intelligence spending.

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You're viewing the US edition You can switch to the UK, AU or IE homepage at any time using this menu. The market rout on Wall Street spread to global stock markets this morning, as the Democrats' midterms victory triggered a retreat from artificial intelligence stocks. There was a sea of red in Asia, with Japan's Nikkei 225 plunging 6 per cent overnight in its worst one-day drop since April 2025, while South Korea and Taiwan's indices plunged more than 8 per cent at the open. In London, the FTSE 100 dropped over 200 points, or 1.96 per cent, to 10,571, having risen as high as 10,948 on Thursday before the tech slump soured the mood. European markets were equally fragile, with Germany's Dax and France's Cac indices falling 2.2 per cent and 1.76 per cent, respectively.

A tech stock rout that began overnight in the United States has persisted in Asian trading. Market authorities in South Korea paused trading on Friday as prices plunged across the region. Global markets have been rattled by a sharp fall in the trading price of tech stocks, which is driven by fears that the Democrats' victory in the US midterm elections will increase regulatory scrutiny of AI and slow the country's data centre build-out. Indices in South Korea and Taiwan plunged more than 8 percent after the opening bell, before cutting losses as authorities scrambled to stem the selling. Wall Street's volatility "fear gauge" soared overnight on Thursday and the tech-focused Nasdaq sank 5.5 percent, wiping $3 trillion off S&P 500 firms, as investors fretted that the Democrats could put the brakes on the AI boom being encouraged by President Donald Trump.

The Nasdaq composite declined more than 5% overnight in U.S. trading. The Nikkei 225 stock average declined more than 7% on Friday morning, falling below 60,000 for the first time since May. It tracked heavy losses on Wall Street on Thursday, as concerns grew over data center and artificial intelligence investments following the Democratic Party's resounding victory in the U.S. midterm elections. By 10:25 a.m., the Nikkei 225 was down 7.09%. Japanese AI, chip and data center-related stocks were hit hard, with Rohm sliding 20%, Furukawa Electric plunging over 19%, Resonac dropping 15%, Kioxia falling more than 12% and SoftBank Group declining 11%. The Topix was down more than 6% in Friday morning trade.

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When will we know results? Midterms didn't appear to have huge impact, though predicted wins for Democrats could mean more regulation US tech stocks made a recovery on Tuesday afternoon after a selloff spooked investors over AI spending. Tuesday's midterm elections didn't appear to have a huge impact on Wall Street, though investors are predicting Democrats get at least a majority in the House and potentially gain seats in the Senate, which could lead to more AI regulation. The S&P 500 was up 0.37% at market closing on Tuesday, while the tech-heavy Nasdaq increased 0.83% for the day. The Dow dropped 0.38% following a 1.9% dip in Apple's share price after the company released a worse-than-expected margin forecast due to the higher cost of memory chips.

Companies have spent the past several weeks trying to reassure investors that Muse and other AI agents pose more of an opportunity than a threat. Meta's Muse was among the hottest topics on corporate earnings calls in recent weeks. Meta has claimed that the agentic AI tool, which lets users automate various online tasks, is becoming a major force in shopping, with millions of people using it to make purchases of more than $200 on average. Wall Street fears that proactive shopping assistants like Muse will erode brand loyalty, ignite price wars, and squeeze corporate profits. Yet on the earnings calls and in conversations with WIRED, executives across roughly 50 companies--spanning travel, internet providers, food, and self-storage--shrugged off immediate disruption.

Image caption, Google CEO Sundar Pichai has backed the company's massive spending on AI. Google parent Alphabet lost just over $500bn (£374bn) in value on Thursday after it rattled Wall Street with its last update of the year on its business operations. Google spooked investors so badly that its stock hit a six-month low, after it revealed its artificial intelligence (AI) summaries on search were affecting ad revenue. Microsoft and Amazon also updated investors this week, and joined Google in plans to keep spending astronomical sums of cash in an ongoing AI race. But investors appeared dismayed at the impacts these plans are having on the ability of each to keep growing their core lines of business.