Global stocks tumbled on Friday as fears over the future of AI rattled investors in the wake of the Democrats' landslide midterm victory, as Donald Trump lashed out at voters with a blunt message: 'You only have yourselves to blame!'
asserted
You → tumble → yourselves
Japan's Nikkei slumped 6 per cent, set for its deepest one-day drop since April 2025.
asserted
Nikkei → slump → April
Benchmark share price indices in South Korea and Taiwan similarly plunged more than 8 per cent after the opening bell, before cutting losses as authorities scrambled to stem the selling.
asserted
authorities → plunge → selling
Wall Street's volatility 'fear gauge' soared, the Nasdaq sank 5.5 per cent and $3trillion was wiped off S&P 500 firms, with investors worried Democrats, who dominated midterm elections this week, will apply brakes to the AI boom.
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who → soar → boom
The tumble came just days after a 'blue tsunami' drowned Republicans during the midterms, with Mr Trump warning that this was the voters' fault for dispatching with his party in a Truth Social post Thursday.
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this → come → post
'The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!' he wrote.
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he → crash → yourselves
The President more explicitly blamed the downturn on the Democrats in a separate post to his Truth Social page.
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President → blame → page
Donald Trump lashed out at voters with a blunt message: 'You only have yourselves to blame!'
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You → lash → yourselves
A man points out an electronic board displaying Japan's Nikkei 225 index trading in Tokyo, Japan
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man → point → Tokyo
'The Stock Market suffered one of the Worst Days in History based on the results of the Election,' Trump said.
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Trump → suffer → Election
It took so much work to get us to a level that no one has ever seen before, and then this.
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one → take → that
Your 401(k)s have, therefore, dropped.
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401(k)s → drop → ?
Remember, it wasn’t Republicans, it was Dumocrats,' Trump added.
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Trump → remember → ?
The political jitters are hitting an AI trade already on shaky footing due to worry about return on companies' enormous investment in AI-related infrastructure, with the meltdown spooking retail investors and hedge funds alike.
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meltdown → hit → investors
On Thursday, stocks related to the artificial intelligence trade were decimated - with tech companies supplying data centers and microchips being the hardest hit.
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companies → relate → centers
Democrats in charge would mean fewer purchases of AI chips and other super intelligence tech-related products, which are currently driving much of the US economy's growth.
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which → mean → growth
As a result of the uncertainty, shares of chip manufacturers Nvidia and Broadcom saw stunning losses on Thursday - NVDA fell 9.3 percent on the day while AVGO dropped 10.5 percent – and competitor Qualcomm finished the session down 9.5 percent.
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Qualcomm → see → session
The tech-heavy Nasdaq Composite ended the day down 5.5 percent, putting it firmly in correction territory after the gradual declines seen over the last four weeks - while the benchmark S&P 500 index fell 4.3 percent.
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index → end → weeks
By Friday afternoon in Asia, stocks appeared to stabilise as authorities worked to soothe nerves, with South Korean Finance Minister Lee Hyoung-il temporarily easing rules on retail investors' leveraged investments.
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il → appear → investments
Multiple sources told Reuters the Ministry of Finance in Taiwan called senior executives at state-owned banks in the morning and instructed them to support the market.
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Ministry → tell → market
Taiwan stocks closed down 4.5 per cent, recovering somewhat from their early morning slump.
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stocks → close → slump
Nasdaq futures were up 0.6 per cent while European stock futures were last down 0.9 per cent, indicating sentiment remained fragile.
AI chipmakers Samsung Electronics and SK Hynix fell nearly 10 per cent and 12 per cent respectively in South Korea.
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sentiment → indicate → Korea
Kioxia plunged 14 per cent in Japan while TSMC fell as much as 8.5 per cent in Taiwan.
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TSMC → plunge → Taiwan
AI investor SoftBank Group slid 11 per cent, while the cost of insuring against the Japanese firm defaulting on debt jumped to its highest in four years.
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firm → slide → years
'The selloff shows that AI stock prices had been built on rosy illusions about the future, and now that illusion is gone,' said Dong Baozhen, chairman of asset manager Lingtong Shengtai.
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Baozhen → show → Shengtai
Now that backbone has snapped.
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backbone → snap → ?
Can AI bull markets elsewhere hold up on their own?'
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markets → hold → own
Investor fear also centred on whether a stalling AI infrastructure expansion could hurt smaller firms whose capacity to raise funds has already been limited by higher interest rates and tighter financial conditions.
uncertain
capacity → centre → rates
Neocloud firm CoreWeave, which has become a barometer of investor anxiety over heavy AI spending and borrowing, slumped 10 per cent, while its five-year credit default swap spreads widened to a record level.
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spreads → become → level
'It's pretty clear there's been a real shift in sentiment,' said Michael McCarthy, chief executive for Australia and New Zealand at brokerage Moomoo.
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McCarthy → be → Moomoo
The selling suggests investors are starting to factor in growing local opposition to data centres, with analysts saying markets have yet to fully account for the costs such facilities impose on communities.
uncertain
facilities → suggest → communities
Texas Governor-elect Gina Hinojosa on Thursday said the state will introduce laws to protect residents with regard to data centres, citing their impact on rural communities.
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state → say → communities
South Korean dealers work in front of monitors and a large screen at the Hana Bank in Seoul, South Korea
Still, some analysts said the selloff was overdone and the bottom was not far off.
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bottom → work → Seoul
'Today we are bound to see further liquidation of margin accounts, which suggests we are likely in the final stage of capitulation,' said Allen Huang, a vice president of Mega Financial Holding's equities trading department.
uncertain
Huang → bind → department
'Even TSMC hit its daily limit down circuit breaker at one point, which typically marks the tail end of a downturn.
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which → hit → downturn
When TSMC gets sold off, that means all stocks have been thoroughly dumped,' Mr Huang said.
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Huang → sell → ?
Bonds gained in Asia, with US Treasuries as well as government bonds in Japan and China rising, while the US dollar slipped against haven currencies such as the yen and Swiss franc.
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dollar → gain → yen
'Bonds are increasingly behaving like bonds again, with income re-emerging as the primary driver of returns and restoring their traditional diversification benefits,' said Masahiko Loo, chief fixed income strategist at State Street Investment Management.
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Loo → behave → Management
'This looks more like a reassessment of AI policy risk than a reassessment of the AI cycle.'
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This → look → cycle
The yield on the benchmark US ten-year Treasury note was at 4.838 per cent, hovering near the lowest level since September 9.
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yield → hover → September
…and 1 more, not listed.
The Aporia
