Global shares fall as AI spending fears hit tech stocks after US midterms
Nasdaq had its worst day in 19 months after a 5.5% slump; Asian and European markets followed Wall Street lower.
Key facts
Story- The Nasdaq fell 5.5% on Thursday, its worst day in 19 months.
- Asian stock markets fell sharply on Friday, and European shares followed.
- Investors worry about huge AI spending and possible tighter rules after Democrats' midterm win.
Stock markets around the world fell sharply this week as a sell-off in US technology shares spread across Asia and Europe. The Nasdaq share index slumped 5.5% on Thursday, its worst day in 19 months, after the Democrats won the US midterm elections.
The fall followed fears that the AI industry will face tougher rules and slower growth. Asian share markets dropped sharply on Friday morning. European shares also fell, and the mood turned negative in London as well.
Worries over data centres
Susannah Streeter, chief investment strategist at Wealth Club, said the sell-off had intensified. "The build-out of datacenters looks set to slow, which risks shredding the spending spree underpinning the boom," she said. She added that investors had become very nervous about the returns on this huge investment.
Markets had been expecting a "blue wave" of Democratic power to bring tighter rules on AI and data centres. That expectation has hit tech stocks hard.
What comes next
It is not yet known how long the sell-off will last or how far the new rules could go. It is also not clear how much the slowdown in data centre building will affect the companies that have been spending heavily on AI.
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