AI investment fears after Democratic midterm win send global stocks lower

Global stocks tumble as AI panic grips markets after Democrats' midterm success

After Democrats won this week's midterms, investors worried that AI investment and data center construction will slow, and global markets followed US stocks down. US stocks lost more than $3.2tn in value yesterday, with the Nasdaq down 5.5% and the S&P 500 down 4.36%; Japan's Nikkei fell nearly 6% at one point today. Analysts link the selloff to regulatory uncertainty, high valuations and doubts about AI returns, while Jefferies argues Democrats will not abandon AI as a growth engine.

Why it matters: Investors sold tech stocks after the Democratic midterm win, and fears of tighter data center regulation, high valuations and return pressure spread the decline worldwide.