Europe and Asia Sell Off Stocks After a US Tech Rout
The tech sell-off that began on Wall Street on Thursday spread around the world on Friday. Asian and European indexes fell sharply, and some analysts expect more waves of selling.
Thursday's rout in the US
The trigger was the Democrats' decisive midterm victory, which set off a rout in US tech stocks. The Nasdaq fell 5.5% on Thursday, its worst day in 19 months.
Chip stocks led the slide. SanDisk, a memory maker, shed 22%, and hard drive maker Western Digital 17%. The Vix, Wall Street's "fear index", climbed by over 60%, reaching its highest point since the opening weeks of the Iran war.
Asia and Europe follow
The heavy falls continued in Asia. Japan's Nikkei 225 lost 6% on Friday, and South Korea's Kospi dropped more than 6.5%.
Christopher Forbes, head of Asia and Middle East at CMC Markets, called the day "actually a bit of a disaster". His clients were long index and long stocks, and he described margin calls and complaints through the night and the day.
London was at one point set for its worst day since March. The FTSE 100 was down as much as 254 points, or 2.35%, at 10,528 in morning trading. It recovered some ground and closed down 1%.
Germany's Dax fell by 2%, France's Cac 40 by 0.8% and Spain's Ibex by 0.6%. Copper also slid on the London Metal Exchange. The three-month contract was down 0.61% and on course for a 2.79% fall this week, its biggest weekly drop since March.
Worries about datacentres
Susannah Streeter of Wealth Club pointed to a collision of worries. In her words, the datacentre build-out looks set to slow, just as investors have become nervous about returns on the huge spending.
Craig Lang of the consultancy CRU said copper is increasingly influenced by the AI market and by sentiment toward datacentre expansion.
Signs of calm and a counter-view
Wall Street steadied on Friday. Tech stocks rose, lifting the S&P 500 by 0.3%, and the Nasdaq closed up 1%, which recovered only part of Thursday's losses. It followed a stronger-than-expected jobs report: the US added 165,000 jobs in October and unemployment fell to 4.1%.
Most indexes are still up for the year. The Nasdaq Composite is up 6.35% since January but is more than 10% below its peak. The FTSE 100 has gained almost 7.5% in 2026, yet sits more than 300 points below its July record.
Chris Beauchamp of IG warned that AI fears remain prominent and that there is a risk of much more selling. He added that investors are also watching for a possible resumption of the Iran conflict, and following oil, after its slump. Mohit Kumar of Jefferies said he did not expect a quick rebound in the US, but did not believe Thursday marked the start of an unwinding of the AI trade. He said Democrats are unlikely to give up on a growth engine that creates jobs.
Source: The Guardian