Global Stocks Drop as AI Slowdown Concerns Rise Post-Democrats’ Midterm Victory

European stock markets experienced a sharp decline following a major sell-off in US technology equities, a trend triggered by the recent Democrats’ victories in the midterms. Investors are now expressing concern about potential slowdowns in the AI industry.

The sell-off in the US on Thursday led to a domino effect on Asian markets, which plummeted on Friday morning. London also felt the impact, as the FTSE 100 index dipped by 1.5%, losing 166 points and settling at 10,615 at the start of trading.

AstraZeneca was one of the hardest hit stocks, opening down by 2.8%, making it the largest decliner on the FTSE 100. Other notable losses included IAG, the parent company of British Airways, which fell 1.5% after missing profit expectations, alongside miners like Antofagasta and Anglo American.

In continental Europe, Germany’s Dax index also opened down by 1.5%, while France’s CAC 40 and Spain’s Ibex indices saw declines of 1.2% and 1.1% respectively.

Susannah Streeter, chief investment strategist at Wealth Club, remarked on the escalating tech sell-off, noting that the negative sentiments from Wall Street were clearly felt in both Asia and Europe. She emphasized growing concerns over the projected slowdown of datacenter expansions, which could jeopardize major funding that has driven the technology sector’s recent growth.

The Nasdaq Composite index recorded its worst day in 19 months, crashing by 5.5%. Semiconductor stocks led the way down, with SanDisk experiencing a staggering 22% drop and Western Digital declining by 17%. The volatility index, known as the Vix, surged by 61%, indicating heightened market unease.

Asian markets continued their downward trend on Friday, with Japan’s Nikkei 225 index plummeting 6% and South Korea’s Kospi falling more than 8% during early trading.

Despite these recent declines, many global stock indices remain in the green for the year. The Nasdaq, for example, has seen a 4.6% increase since January, although it is currently over 10% below its peak. Meanwhile, the FTSE 100 has gained approximately 6.9% in 2026 but is still more than 300 points off its all-time high from July.