Nikkei Falls 6.2% as AI Sector Selloff Extends to Asia

Asian stock markets dropped on Friday after a steep decline in artificial intelligence shares on Wall Street. The sell-off marked the worst performance for the S&P 500 since April 2025, when President Donald Trump's tariffs caused global market turbulence.

In Tokyo, the Nikkei 225 index fell 6.2% in morning trading to close at 57,271.19. South Korea's Kospi index dropped 7.1% to 5,000.25. Australia's S&P/ASX 200 lost 0.7% to end at 9,003.40.

The U.S. market action that triggered the Asian slide included a 4.4% drop in the S&P 500. The index fell 334.89 points to 7,353.73. The Dow Jones Industrial Average lost 1,833.06 points, or 3.4%, to reach 51,523.06. The Nasdaq composite tumbled 5.5%, shedding 1,421.52 points to 24,315.00.

Investors expressed concern over the cost of building AI data centers. High borrowing costs have raised fears that construction may slow. Critics also argued that AI stock prices had risen too quickly. This sentiment was reinforced by the results of Tuesday's U.S. midterm elections. Democratic gains raised the prospect of government pauses on new data center projects.

Nvidia, a leading chipmaker, fell 9.3% in trading. The stock is now down 2.6% for the year. This follows annual gains of roughly 39%, 171%, and 239% in the previous three years. Advanced Micro Devices dropped 17.3%. CoreWeave, a cloud computing firm, fell 9.8%. GE Vernova, which supplies power equipment for data centers, sank 7.5%.

A reduction in AI data center construction would reduce demand for chips and electricity. These components drive a large portion of U.S. economic growth. In the bond market, the yield on the 10-year Treasury fell to 4.84% from 4.90% the previous day. It stood above 5.30% last month. The yield on the 30-year Treasury also declined.

Energy prices rose as investors reacted to market uncertainty. Benchmark U.S. crude oil increased 0.60% to $91.06 per barrel. Brent crude gained 3.88% to $98.29 per barrel. In currency markets, the U.S. dollar strengthened to 157.83 Japanese yen from 157.65. The euro slipped to $1.1216 from $1.1218.