Asian Markets Slide as Democrats’ Election Victory Fuels AI Concerns

Japan’s Nikkei fell as much as 4.7% and South Korea’s Kospi dropped 3.8% before both pared or reversed losses. US index futures also declined, with losses easing after projections indicated Democrats would control both chambers of Congress.

4 Nov 2026

Markets across Asia reacted sharply to the Democrats’ unexpectedly strong performance in the US midterm elections, as investors weighed concerns that the result could slow the expansion of artificial intelligence. US futures for major indexes fell, although their losses narrowed after projections pointed to Democrats regaining control of the House and securing a Senate majority.

Japan’s Nikkei dropped as much as 4.7% during early trading, before trimming its decline to less than 2%. South Korea’s Kospi fell 3.8%, then later recovered all of its losses.

The Nikkei’s steep move also reflected a holiday in Japan on Tuesday, which left the market catching up with Monday’s sharp declines in semiconductor and AI stocks. Tokyo shares initially opened slightly higher on Wednesday after better-than-expected results from US chipmaker AMD, but then fell sharply amid renewed doubts about AI.

Sources: Handelsblatt.