AI investment fears drive global stock sell-off – Latest News
AI investment fears drive global stock sell-off
NEW YORK
Wall Street recovered some ground on Nov. 6 after fears that Democratic election gains could slow the U.S. artificial intelligence investment boom triggered a sell-off that spread to Asian and European markets.
The Nasdaq 100 fell 6.4 percent and the S&P 500 lost 4.4 percent on Nov. 5. The Financial Times estimated that the session erased $3.2 trillion from U.S. stock market value.
The Nasdaq 100 rebounded 1.4 percent the following day, while the S&P 500 gained 0.3 percent. The broader U.S. benchmark still finished the week 2.7 percent lower.
Losses continued across Asia. Japan’s Nikkei 225 fell about 6 percent on Nov. 6, while South Korea’s Kospi closed 6.02 percent lower after an intraday decline of more than 8 percent triggered a 20-minute trading halt.
Samsung Electronics ended the session down 6.35 percent and SK hynix lost 10.44 percent. Europe’s Stoxx 600 fell about 1 percent.
The selling followed the Democrats’ victory in the Nov. 3 elections, which gave them majorities in both chambers of Congress and governorships in states important to data center expansion.
Investors feared that greater scrutiny of electricity demand, water consumption and costs to local communities could delay projects supporting the AI industry’s growth.
UBS analysts estimated that potential construction pauses could put about 30 percent of expected U.S. data center capacity additions in 2028 at risk.
Texas Governor-elect Gina Hinojosa said her proposed moratorium would apply only to new permits, the Financial Times reported. The state is a major destination for data center investment.
The political uncertainty added to existing concerns about whether heavy spending on AI infrastructure would generate sufficient returns. Higher borrowing costs have also put pressure on smaller cloud computing companies that depend on raising funds to expand.
President Donald Trump linked the sell-off to the election result and told voters on Truth Social they had only themselves to blame.
The market decline also raised questions about Anthropic’s planned initial public offering. The Wall Street Journal reported that the company was targeting a listing in the week of Nov. 16 and could raise up to $100 billion. At that size, it would be the largest IPO on record.
Three prospective investors told the newspaper that a previously discussed valuation of about $1.5 trillion would need to be lowered, with one suggesting a figure closer to $1 trillion. A smaller offering or a delay were also possibilities, the report said.
Anthropic declined to comment on investor doubts, Reuters reported.
Separately, major technology companies are negotiating a national framework for data centers with environmental organizations, according to a document reviewed by AFP.
Google, Meta, Microsoft, Amazon, Nvidia, Oracle and Anthropic are participating alongside groups including the Natural Resources Defense Council, WWF and the Sierra Club. Discussions cover energy and water use, effects on local communities, transparency and accountability.
The meetings began in September and are scheduled to continue through February 2027.
Oil prices also fluctuated as traders weighed hopes for a de-escalation of the Iran war against continuing threats to shipping in the Middle East.
Brent crude briefly rose above $100 a barrel on Nov. 6 before settling at $98.32, little changed on the day, following a 3.9 percent increase in the previous session. Spot gold traded around $4,066 an ounce late in the U.S. session.
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