European stocks fall as AI rout spreads after US midterms

European shares opened lower on Friday, November 6, as a global sell-off in artificial intelligence stocks reached the region. The losses wiped out the STOXX 600's gains for the week. Investors were weighing whether Democrats' takeover of the US Congress could lead to limits on spending for AI data centres, Reuters reported. Europe held up better than the US and Asia because its benchmark has less exposure to AI stocks.finance.yahoo.com

Broad declines across the region

The losses were not limited to technology. Media, healthcare and retail stocks led the fall, while most major regional benchmarks also dropped sharply, according to Reuters. Chip-wafer maker Siltronic ↘ 15.66% and ASMI ASM International N.V. fell. AI equipment suppliers Schneider Electric and Siemens Energy slipped slightly. Teleperformance dropped sharply after cutting its full-year revenue growth outlook. London's FTSE 100, Germany's DAX and France's CAC 40 all traded lower. The BBC noted that "nearly all shares are trading lower," which suggested investors were selling more than just tech. The BBC added that the London Stock Exchange has few technology stocks, which made the FTSE 100 less vulnerable to the AI slump.bbc.com+1

Wall Street and Asia hit harder

The sell-off started on Wall Street on Thursday. The Nasdaq Composite closed down 5.5%, the S&P 500 ↗ 1.04% fell 4.4%, and the Philadelphia Semiconductor Index PHLX Semiconductor Index ↗ 3.62% dropped 12.2%. That was the chip index's biggest one-day fall since 2020, Euronews reported. The Nasdaq's slide put it in correction territory, meaning at least 10% below its recent peak. Seven of the largest US tech companies lost about $1 trillion in combined market value, the BBC reported.ca.finance.yahoo.com+1

Asia fell further on Friday. Japan's Nikkei 225 closed 6% lower. South Korea's Kospi also ended down 6% after a steeper drop triggered a 20-minute trading halt. Chipmaker SK Hynix ↗ 1.65% lost more than 10%, according to Euronews.ca.finance.yahoo.com

Midterms and the data-centre backlash

Democrats won both the Senate and the House in Tuesday's midterm elections. Many of their candidates had campaigned on slowing the growth of AI and opposing the data centres that power it. Market intelligence firm Cleanview estimates that about 40% of planned US data-centre capacity is in states whose governors or governors-elect have promised or already imposed a pause on new projects, Euronews reported. Reuters said the political risk added to existing worries about weak returns, high valuations and investment funded by debt.finance.yahoo.com+2

President Donald Trump blamed Democrats for the market drop. In a post on Truth Social, he wrote that "the Stock Market crashed today because the Dumocrats had a big Tuesday". Neil Wilson of Saxo Markets said the sell-off looked overdone but added that investors would want to see markets stabilise first.ca.finance.yahoo.com