Global Tech Rout Deepens as Semiconductor Valuations Collapse Over 40%; Authorities Intervene Across Asia

Global technology stocks suffered another day of heavy losses on Friday, extending a rout that has wiped out more than $1 trillion from the Magnificent Seven alone and driven semiconductor valuations down more than 40%, according to Macrobusiness. The selloff, which began on Wall Street on Thursday, spread across Asia and Europe as investors reassessed the outlook for artificial intelligence spending and braced for increased regulatory scrutiny.

**Wall Street’s Bloody Thursday**

The Nasdaq Composite slumped 5.5% on Thursday, its steepest one-day decline in 19 months, The Guardian reported. The S&P 500 fell 4.4%, while the Dow Jones Industrial Average lost 3.4%, or more than 1,800 points. The Philadelphia Semiconductor Index plunged 12.2%, one of its largest single-day drops on record.

Nvidia fell 9.3%, and Advanced Micro Devices dropped 17.3%, according to NDTV Profit. The Magnificent Seven — Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta Platforms and Tesla — lost more than $1 trillion in combined market value during the session, with Nvidia accounting for more than $440 billion of the decline.

**Friday’s Partial Recovery**

US tech stocks opened higher on Friday, with the Nasdaq rising 1.2% in early trading and closing up 1.09%, according to The Guardian. AI-linked stocks led the rebound: AMD gained 8.1%, SanDisk rose 8.3%, and Nvidia added 6.5%. However, the Dow fell 1% at the open, dragged down by old-economy stocks such as Nike, Walmart and McDonald’s.

The rebound was modest. The Nasdaq posted its fourth consecutive weekly fall, and the broader picture remained grim. “After Thursday’s brutal sell-off wiped trillions of dollars off global equity valuations, today’s bounce has carried the Nasdaq 100 straight back into former support, and the worries behind the rout, from AI regulation to the sheer scale of tech spending, have not gone away,” said Fawad Razaqzada, market analyst at Stonex Trading and FOREX.com, as quoted by The Guardian.

**Asia’s Bear Market Cascade**

The selloff slammed Asian markets on Friday. Japan’s Nikkei 225 slumped 7% after the opening bell, its deepest one-day drop since April 2025, according to Al Jazeera. South Korea’s Kospi plunged as much as 8.8%, triggering a 20-minute trading halt, before closing down 6%, NDTV Profit reported. Taiwan’s Taiex fell as much as 9% and entered a bear market, closing down 4.5% but posting its biggest weekly loss since 2001, ZeroHedge reported.

Four major Asian markets are now in bear territory, according to NDTV Profit: South Korea’s Kospi is down about 45% from its June record, China’s Shenzhen market 30% below its June high, Taiwan’s market 24% below its October peak, and Japan’s Nikkei 21% below its June record.

Semiconductor stocks led the declines. SK Hynix fell as much as 13% and Samsung Electronics dropped more than 10% in South Korea, NDTV Profit said. Japan’s Kioxia plunged 14%, while SoftBank Group lost 11%. Taiwan Semiconductor Manufacturing Co. fell as much as 8.5% before closing 4.7% lower.

Chinese stocks also tumbled. The Shanghai Composite Index fell 1.1%, while the tech-focused Star 50 Index and the AI Index slumped as much as 5% before recouping some losses, Free Malaysia Today reported. In Hong Kong, the Hang Seng Index was down 1%, and the Hang Seng Artificial Intelligence Index tumbled 4%.

**Authorities Step In**

Governments across Asia moved to stem the panic. Taiwan’s Financial Supervisory Commission will impose curbs on short selling from Nov. 9, reducing the cap on intraday short-sale orders to 3% of a stock’s average daily volume from 30%, and raising the minimum margin requirement to 130% from 90%, according to ZeroHedge. The Finance Ministry prepared a NT$500 billion ($15 billion) stock stabilization fund, pointing to continued foreign selling as evidence of “a significant deterioration in market confidence.”

In South Korea, Deputy Prime Minister and Finance Minister Lee Hyoung-il promised “proactive” measures and suspended the margin-loan collateral rule that forces brokers to dump leveraged retail positions, ZeroHedge reported. In China, state entities stepped in to buy equities in a bid to stabilise the market, Al Jazeera reported.

**The Political Trigger**

The rout was driven by fears that the Democrats’ victory in the US midterm elections will increase regulatory scrutiny of AI and slow the country’s data centre build-out, Al Jazeera reported. President Donald Trump had encouraged the AI boom, and investors now worry that Democratic gains could put the brakes on it.

A key flashpoint is Texas. Democrat Gina Hinojosa defeated Republican Governor Greg Abbott in a surprise victory and has pledged to halt new data centre approvals until the state introduces rules to protect residents from higher electricity and water costs, NDTV Profit reported. Texas accounts for about 25% of planned US data centre capacity, according to Goldman Sachs estimates cited by NDTV Profit.

“The selloff shows that AI stock prices had been built on rosy illusions about the future, and now that illusion is gone,” Dong Baozhen, chairman of asset manager Lingtong Shengtai, told Reuters, as quoted by Al Jazeera and Free Malaysia Today. “The US stock market has been the standard-bearer and backbone of the global AI bull run. Now that backbone has snapped.”

**Credit Markets and Forced Selling**

The selloff was not solely political. Lee Robinson, CIO of Altana Downside Protector Fund, told The Guardian: “This sell off has been a long-time coming, and it is not just caused by the midterms or an unwinding of positions in the tech giants. What we are seeing today is the result of stretched valuations and last month’s re-pricing in credit markets, specifically the rising Credit Default Swaps of the Magnificent Seven and CoreWeave.”

The unwinding of crowded positions in high-valuation technology stocks added to the pressure, with leveraged positions and forced selling amplifying the declines, NDTV Profit reported.

European markets also fell sharply. The FTSE 100 closed down 1%, Germany’s Dax fell 2%, France’s Cac 40 lost 0.8%, and Spain’s Ibex ended down 0.6%, according to The Guardian.

**Outlook**

Analysts warned that the risks remain tilted to the downside despite Friday’s bounce. “The index is still carving out lower highs and lower lows,” Razaqzada said. “The near-term risk remains tilted to the downside.”

Toby Walsh, chief scientist for the AI Institute at Australia’s University of New South Wales, told Al Jazeera he expected new regulations on data centres in many countries, including the US, Australia and the UK. “The developers were building them in a way that wasn’t actually getting social licence,” he said.