Asian benchmarks decline after AI worries send Wall Street tumbling

TOKYO (AP) — Japan’s stock benchmark tumbled more than 6% after trading opened Friday, and other Asian stocks also declined following a widespread sell-off of issues related to artificial intelligence on Wall Street.

Tokyo's benchmark Nikkei 225 recouped some of those initial losses, trading 5.7% lower at 57,576.63 by midday. Australia's S&P/ASX 200 lost 1.0% to 8,973.00. South Korea's Kospi dropped 7.4% to 4,985.99, as Samsung Electronics shares shed 7.9% in morning trading. Hong Kong's Hang Seng fell 0.7% to 24,630.03, while the Shanghai Composite dipped 1.3% to 3,642.10.

Stock markets around the world have been feeling pressure from continued declines for companies that have benefited from the boom in the artificial-intelligence technology industry. Such stocks have been swinging for months on worries that the construction of AI data centers may slow because of how expensive it’s become to borrow money. Critics also say AI stock prices had shot too high and were in a bubble.

Toyota stock declined sharply after the Japanese automaker reported lackluster profits the previous day. Nintendo, which also reported earnings the previous day, saw its stock price fall amid the overall market tumble. Sony Group stock fell slightly. The company reported booming results on the back of the success of its latest Spider-Man movie.

On Wall Street, the S&P 500 fell 4.4% Thursday for its worst day since U.S. President Donald Trump shook markets worldwide in April 2025 with his “Liberation Day” tariffs. The wipeout more than erased the U.S. stock market’s gain from the day before, which was its best in three months.

The Dow Jones Industrial Average sank 1,833 points, or 3.4%, while the Nasdaq composite tumbled 5.5%. The Nasdaq, which is full of AI-related and other tech stocks, sank 11.9% below its all-time high set last month. Stock geeks call a loss of more than 10% a “correction.”

Tuesday’s U.S. midterm elections added another challenge. The nationwide victories for Democrats raised the possibility that governments could force pauses in construction of more data centers. Voters across political parties say they’re wary about AI and don’t like the increases to power bills caused by data centers.

Any slowdown in construction of AI data centers would mean fewer purchases of AI chips, not to mention electricity and other products and services that are getting vacuumed up in the AI frenzy, which is driving much of the U.S. economy’s growth.

Nvidia, the chip company that quickly became the face of the AI boom, fell 9.3% and was by far the heaviest weight on the S&P 500. It’s now down 2.6% for the year so far following annual gains of roughly 39%, 171% and 239% in the last three years.

Advanced Micro Devices tumbled 17.3%. CoreWeave, a company that rents access to AI chips to customers over the cloud, fell 9.8%. GE Vernova, which has been helping to power data centers, sank 7.5%.

Compounding the pain for investors, AI chip stocks are some of Wall Street’s most influential because they’ve become some of the largest. A 1% move for Nvidia, for example, has more effect on the S&P 500 than a 1% move for nearly any other U.S. stock.

Stock prices tend to follow where corporate profits and interest rates go over the long term, depending on them much more than on who controls what in Washington.

All told, the S&P 500 fell 334.89 points to 7,353.73. The Dow Jones Industrial Average dropped 1,833.06 to 51,523.06, and the Nasdaq composite sank 1,421.52 to 24,315.00.

In energy trading, benchmark U.S. crude added 0.65% to $91.11 a barrel. Brent crude, the international standard, gained 1.4% to $99.73 a barrel. Uncertainty still reigns about what will happen in the war with Iran and when the global energy industry can return to normal.

In the bond market, Treasury yields continued to tumble Thursday. The yield on the 10-year Treasury fell to 4.84% from 4.90% late Wednesday. It had been at 4.95% on election night and above 5.30% last month. That could be a signal that investors are herding into U.S. Treasury bonds in search of something that’s safer to own as stock prices tumble.

The drop in yields came despite some encouraging reports on the U.S. economy. Fewer U.S. workers applied for unemployment benefits last week.

In currency trading, the U.S. dollar rose to 157.97 Japanese yen from 157.68 yen. The euro cost $1.1209, down from $1.1219.

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