Global markets suffered a sharp sell-off on November 5 as investors reassessed the outlook for artificial intelligence (AI) investment, semiconductor demand and data-center expansion.
The S&P 500 fell 4.4%, the Nasdaq Composite dropped 5.5%, and the Dow Jones lost more than 1,800 points. The decline also spread to Asia, where South Korea’s KOSPI plunged more than 8% on Friday. While Democratic election victories raised concerns about tighter AI infrastructure regulation, growing doubts over technology valuations and investment returns added to the pressure.
AI Stocks Lead Wall Street’s Decline
Technology and semiconductor stocks led Thursday’s losses. The Philadelphia Semiconductor Index dropped more than 12%, while Nvidia fell around 9% and AMD declined approximately 17%.
Investors are increasingly questioning whether massive AI infrastructure investments will generate sufficient returns. Concerns over high valuations, financing costs and the profitability of data-center projects have added pressure to the sector.
Election Results Raise Data-Center Concerns
Democratic victories in the midterm elections have raised expectations of greater scrutiny of AI infrastructure development. Proposals to restrict or pause new data-center projects have created uncertainty around expansion plans.
Potential delays could affect semiconductor manufacturers, cloud providers and companies supplying networking and power equipment. UBS analysts have warned that a portion of planned US data-center capacity additions in 2028 could face disruption from construction restrictions.
Asian Markets Extend the Sell-Off
The pressure spread to Asian markets on Friday. South Korea’s KOSPI plunged more than 8%, triggering a temporary trading halt, while semiconductor companies Samsung Electronics and SK Hynix faced heavy selling.
The decline highlights how closely Asian markets are tied to the global AI supply chain. Weakness in US technology stocks has quickly translated into pressure on semiconductor manufacturers across the region.
Trump Blames Democrats for Market Losses
President Donald Trump blamed the Democrats’ election victories for Thursday’s market decline, highlighting the impact on retirement savings and 401(k) accounts.
However, the sell-off reflects several overlapping concerns, including AI spending, semiconductor demand, elevated valuations and uncertainty surrounding data-center regulation.
What Comes Next for Global Markets?
Investors will now watch technology companies’ capital expenditure plans, semiconductor demand and developments around data-center approvals. Any indication of slower AI infrastructure investment could keep pressure on technology stocks.