Hong Kong (AFP) - Shares of technology companies suffered sharp losses on Friday, with investors following a decline on Wall Street fueled by fears that the Democrats will tighten regulatory restrictions on the artificial intelligence sector, after their landslide victory in the US midterm elections this week.

Published on: 06/11/2026 - 11:29

Stock markets witnessed sharp declines in early trading, especially in Seoul and Tokyo, as investors rushed to sell shares of technology companies due to concerns about the future of the artificial intelligence sector, which was behind the stock markets rising to record levels just five months ago.

Although the Democrats' victory in Tuesday's elections initially excited investors, amid hopes that President Donald Trump would push an end to the war on Iran, fears quickly escalated that this victory would hinder plans to expand artificial intelligence projects.

Data centers have faced widespread opposition from American voters regardless of their party affiliation, and many midterm election winners have pledged to work to rein in these projects.

The results exacerbated existing concerns about the hundreds of billions of dollars that companies have pumped into the sector, and the date on which they will begin achieving returns on their investments, while the recent rise in borrowing costs has raised additional concerns about their financial conditions.

Michael Hewson of MCH Market Insights said that investors are selling their shares due to "concerns that plans to expand in artificial intelligence may face greater opposition, as the election results in Texas raised fears that politicians in the state would target Elon Musk's companies Tesla and SpaceX because of his support for Trump."

The Nasdaq index in New York fell by 5.5%, recording its worst daily performance in percentage terms since April of last year, when Trump announced large-scale global tariffs.

The Standard & Poor's 500 index fell more than 4%, while the Dow Jones index lost more than 3%.

Bloomberg reported that the Philadelphia Semiconductor Index fell by about 16% this week, heading towards recording its worst weekly performance since April of last year.

Trump blames Democrats

Trump held the Democrats responsible, and wrote on his Truth Social platform after the US financial markets closed, “The stock market collapsed today because the Democrats achieved a huge victory on Tuesday (...) It is sad to see this, you only have yourselves to blame.”

The sharp selling wave extended to Asian markets.

The Seoul Index briefly fell by about 9%, before ending trading down by 6%, with the shares of the giant chip company SK Hynix losing more than 10%, while the shares of its competitor Samsung fell by 6.4%.

The KOSPI index more than doubled between the end of December and mid-June, when it hit a record high, before losing about 50% of its value since then.

In Tokyo, the main index fell by 6%, with SoftBank shares falling by more than 10%, Kioxia shares by 8.7%, and Advantest shares by 5%.

A 4.7% decline in the shares of the Taiwanese semiconductor company TSMC led to a decline in the Taipei index by an almost identical percentage.

The Hong Kong, Shanghai, Sydney, Singapore, Jakarta, Bangkok, Wellington and Manila stock exchanges also recorded losses.

In Europe, the London, Paris and Frankfurt stock exchanges all fell by more than 1% at the opening.

Morale was also affected by the rise in oil prices, continuing Thursday's gains after a sharp decline following the results of the midterm elections, amid hopes of ending the war with Iran.

Traders are awaiting developments in the crisis after the leaders of the United States and Iran indicated progress earlier this week.

Investors are also awaiting the release of US employment market data later Friday, after generally positive indicators issued earlier in the week.

© 2026 AFP

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