Asia takes the next hit as the AI selloff spreads to Europe
Chip-heavy Asian markets fell sharply, and European shares opened lower after Wall Street's technology rout.
The AI selloff did not stop at Wall Street's closing bell. Shares in Japan, South Korea and Taiwan fell sharply Friday, and European stocks opened lower as investors questioned how much growth is already priced into the companies building the AI economy.
Japan's Nikkei fell about 6%. South Korea's Kospi dropped as much as 8.8% during the session, triggering a temporary trading halt, while Taiwan's main index finished down 4.5%. Those moves followed Thursday's 5.5% slide in the Nasdaq Composite and 4.4% fall in the S&P 500.
The pressure is landing heavily on the chip supply chain. Samsung Electronics, SK Hynix and TSMC were among the stocks caught in the selling. Investors are weighing doubts about returns on enormous AI spending alongside the possibility of tighter scrutiny of data-center development after the U.S. midterm elections.
The policy risk is still about what might happen. The market reports describe fears of tighter scrutiny, rather than an announced nationwide halt to AI construction.
Europe has less direct exposure to the biggest AI stocks, but it was not insulated. Major regional markets fell in early trading, and weakness extended beyond technology. For the background to the overnight moves, see Thursday's Dusk Ledger.
