Technology stocks saw a rebound on Friday following a sharp decline the previous day, as traders evaluated how a Democratic sweep in the US midterm elections might impact the artificial intelligence sector.
An AI-focused sell-off that erased approximately $2.5 trillion in market value from Wall Street moderated on Friday, though not before causing significant damage to markets across Asia and Europe.
US tech stocks experienced a modest recovery, with the Nasdaq and S&P 500 climbing 1.1% and 0.3%, respectively. Conversely, the Dow Jones Industrial Average dipped by about 0.5%. Markets frequently see a slight bounce following a sell-off as global markets.
Some of the US stocks that suffered the most on Thursday—specifically those tied to the AI sector—staged a comeback, with Nvidia shares rising 2.8% and SpaceX gaining 8.6%. Both companies had seen their share prices plummet by about 9% on Thursday, with Nvidia enduring its worst single-day performance since January 2025.
Nevertheless, the signs of stabilization on Wall Street followed difficult trading sessions in Asia and Europe. The Kospi index in South Korea and Japan’s Nikkei 225 both finished the day down 6%, while Taiwan’s Taiex benchmark dropped 4.5%.
These movements highlighted a retreat by investors from some of the year’s most popular trades. Asian technology firms, which serve as a critical link in the global electronics supply chain, have been bolstered by the relentless demand for components like semiconductor chips required to construct massive AI data centers.
European indexes, which are not as heavily weighted toward technology, also saw a modest decline. The regional Stoxx 600 index fell 1%, while the CAC 40 in France and Germany’s DAX retreated 0.8% and 1.9%, respectively.
Shares of ASML, the Dutch manufacturer of chip-making equipment and Europe’s largest company linked to the AI industry, tumbled 6.6% on Thursday, though the stock managed to recoup some of those losses by Friday afternoon, finishing up 2.7%.
The significant volatility in AI stocks this week highlights the growing uncertainty among investors regarding what the US midterm election results imply for the AI trade. Many are concerned that the <a sweeping victories could hinder the AI investment boom that has served as a primary driver for both the economy and the markets throughout the year.
