The AI Selloff Hit Wall Street, Then Tokyo And Seoul

Brian CurcioPublished November 6, 2026

The Nasdaq Composite fell 5.5% on Thursday and closed in correction territory, more than 10% below the record high it set on October 6, with chip designers and the companies that rent out artificial-intelligence computing taking the worst of it. Money went into government bonds instead, and the two-year Treasury note ended Thursday at 4.46%. Overnight the selling reached Asia, where Japan's Nikkei 225 closed about 6% lower and an automatic halt stopped trading in Seoul for twenty minutes.

Fast Facts

Initial claims for unemployment benefits fell to 189,000 in the week through October 31, below the 197,000 economists had expected (Read More)
A combined $456 billion came off the value of Tesla and SpaceX over two days as investors weighed what a divided Washington means for Elon Musk's companies (Read More)
Ballot measures restricting data-center construction passed 43 to 1 on Tuesday, by Axios's count (Read More)
Dropbox agreed to buy Tigris Data for $350 million to build a storage platform aimed at developers of AI models and agents (Read More)
The Internal Revenue Service published the 2027 tax brackets, standard deduction and capital-gains thresholds, the figures that set what a given income owes next year (Read More)
Wendy's rejected a $1.4 billion takeover offer from Nelson Peltz's hedge fund Trian, backing its own turnaround plan instead (Read More)

Global News

Norway's central bank left its key interest rate unchanged but said it was ready to raise it if inflation stays high (Read More)
Consumer inflation in Thailand reached a near four-year high in October, above its central bank's target range, as fuel costs rose (Read More)
Indian government bonds were Asia's best performers this week, the benchmark yield falling about 22 hundredths of a percentage point as oil and American borrowing costs came down (Read More)
Lawmakers in Paraguay voted to impeach President Santiago Pena amid the collapse of a bank with close ties to him (Read More)

Wall Street's Worst Day In Nearly 19 Months Landed On The AI Builders

Thursday, November 5 was the worst session on Wall Street in nearly 19 months, by the count in the Reuters report carried by Investing.com. The Nasdaq Composite, the index most weighted toward technology companies, fell 5.5% to 24,315.00 and finished in what traders call correction territory, meaning more than 10% below its most recent peak, the record close of 27,599.89 on October 6. The S&P 500 fell 4.36% to 7,353.73 and the Dow Jones Industrial Average fell 3.44% to 51,523.06. That reversed Wednesday, when the Dow rose 3.03%.

The selling was not spread evenly. The same report put the Philadelphia Semiconductor Index, which tracks the companies that design and make chips, down about 12% on the day, and the individual moves were larger still: AMD fell 17.26%, Micron 17.46%, SanDisk 22.26% and Nvidia 9.26%. The big platform companies got off lighter, Microsoft, Meta, Amazon and Alphabet each down between 2% and 4%. Government bonds went the other way, as they often do when money moves toward safety. At Thursday's close the two-year Treasury note yielded 4.46%, down 12 basis points, a basis point being one hundredth of a percentage point. The ten-year note yielded 4.84% at that same close.

The link between the ballot results and the price of a chip designer runs through the buildings themselves, because chip designers sell into data centers. Across Reuters, MarketWatch and the Wall Street Journal, Thursday's selling is tied to two things at once: investors concluding Tuesday's results will slow data-center construction, and disappointment in the forecasts chip designers gave for their own coming quarters. A share price is a claim on profits that have not happened yet, so it moves on the schedule those profits are expected to keep, not on this quarter alone. Push the building schedule out and there are fewer orders ahead for whoever was going to supply the computers inside, which is why the designers fell harder than the companies renting the finished capacity.

The size of the loss is disputed. MarketWatch put the one-day drop in the S&P 500's market value at an estimated $2.9 trillion and the Wall Street Journal's figure at $2.5 trillion, because each counted a different group of companies at a different moment. The percentages above are what everyone agrees on. Volume was heavy too, 26.9 billion shares against a 20-session average of 17.7 billion by the Reuters count, so plenty of buyers met those sellers. Axios reported the industry now offering host communities dividends, school funding and environmental concessions. Separately, it reported the president attributing the selloff to Tuesday's election result.

Sources: Reuters via Investing.com · MarketWatch · WSJ · Axios on the industry response · Axios on the president's reaction · our briefing of November 5

The Selloff Went Around The World And Hit Asia's Chipmakers Hardest

Friday's Asian session picked up where New York left off. Japan's Nikkei 225 closed about 6% lower, which by Investing.com's framing leaves it more than 20% below its June record high and in a bear market, the term for an index down 20% or more from a recent peak. South Korea was worse. The KOSPI fell as much as 8.8% during the session, to 4,911.28, and once the decline passed 8% the exchange triggered a circuit breaker: a rule that halts trading for a set stretch, 20 minutes in this case, so buyers and sellers get a pause to read the news instead of reacting to each other. The KOSPI closed about 6% lower, and Taiwan's weighted index fell 4.5%.

Those three markets took it hardest because the companies that build AI hardware are listed in Seoul, Taipei and Tokyo, not New York. Samsung Electronics fell 6.4% and SK Hynix 10.4%; both make the memory chips that hold the data an AI model works through. TSMC, down about 5%, manufactures the processors American firms design but do not build themselves. Their customers are American technology companies, and Investing.com and Al Jazeera both trace this week's selling to worries about how much those buyers will spend. A software company with an AI product loses a story when sentiment turns; a memory maker loses orders, and orders are revenue.

The rest of the region barely moved by comparison. Investing.com has Hong Kong's Hang Seng down 1.2%, the Shanghai Composite down 1.1% and the CSI 300 down 1.4%. Australia's ASX 200 slipped 0.5%, Singapore's Straits Times fell 2.8%, and India's Nifty 50 closed 0.5% higher. The selling did not track geography or time zone. It tracked exposure. An index is a basket of a market's largest listed companies, and in Seoul and Taipei that basket is full of chipmakers, while in Mumbai and Sydney it is banks, insurers and consumer companies selling at home. On a day like this one the question worth asking is not how far everything fell, but whose sales the market was reconsidering.

Sources: Investing.com · Al Jazeera · WSJ · our briefing of October 29

The Bank Of England Raised Rates For The First Time In More Than Three Years

The Bank of England raised Bank Rate by a quarter of a percentage point to 4% at its meeting ending November 4, announced on Thursday. Bank Rate is the rate the Bank sets, and it shapes what banks charge each other, which feeds through to mortgage payments and savings accounts. The vote was 8-1, the one dissenter wanting a half point, to 4.25%. It is the first increase in more than three years. Governor Andrew Bailey put the reason plainly: "There is now enough inflationary pressure in the pipeline caused by the rise in energy prices, that an increase in Bank Rate is warranted." British consumer price inflation rose to 3.5% in September, and the Bank expects it to reach around 5% by the middle of next year.

Notice the shape of that: a central bank making borrowing more expensive because of an inflation problem that starts with energy. No committee can produce energy, and a higher Bank Rate does not refill a pipeline or shrink anyone's fuel bill. What it can do is stop a one-off jump in one set of prices from spreading into a general rise in all of them, by cooling demand everywhere else. Energy is doing the same work across the Channel, where a first estimate put euro-area inflation at 4.0% in October. Where the rate goes next is contested among the people who vote on it. Bailey said "the next move could be up, down, or sideways"; the policymakers Megan Greene and Huw Pill spoke of "further tightening", meaning more rate rises, and "additional hikes". The next decision is December 17.

Sources: Bank of England · Reuters via Investing.com · WSJ · our briefing of October 21

What To Watch

The October employment report:

The Bureau of Labor Statistics was scheduled to publish the October employment report at 8:30am ET on Friday, November 6. Ahead of that release, economists surveyed by Reuters expected a gain of 65,000 nonfarm payroll jobs, the count of paid positions outside farming, the military and self-employment, with estimates running from 35,000 to 125,000.
September's gain was 29,000, held down in part by a late Labor Day. The unemployment rate was expected to hold at 4.2%, and average hourly earnings to rise 0.3% on the month after 0.1%, and 2.9% from a year earlier after 3.0%.
The October consumer inflation report is expected next Tuesday.

Earnings:

118 companies were scheduled to report Friday, 47 of them worth more than $2 billion.
Monday brings 254 reporters. Constellation Energy (CEG) is expected before the open at an average analyst estimate of $3.90 in earnings per share against $3.04 a year ago, Occidental Petroleum (OXY) after the close at $1.43 against $0.64, and Take-Two Interactive (TTWO) at $0.49 against $1.04.
Tuesday brings 153. CoreWeave (CRWV) is expected after the close at a loss of $1.45 against a loss of $0.31, the first company renting out artificial-intelligence computing to report since Tuesday's ballot results.

Further out:

The Bank of England's next rate decision is December 17.
Every earnings figure above is an average of analyst estimates rather than a result.

The Classroom Takeaway

One American election result took more off a Korean memory chipmaker than off an Indian government bond, because the selling tracked exposure to one kind of spending rather than a place on the map. Students can watch that spread open up for themselves by holding a few different positions at once in our stock market simulator.