Global market rout: Nasdaq loses $2.5t in a day

Global stock markets have come under heavy selling pressure amid concerns over tighter regulation of artificial intelligence (AI) and the potential impact of political changes following the US midterm elections, according to a BBC report published on Friday.
Technology stocks have been particularly hard hit, with a broad sell-off reportedly wiping trillions of dollars off global market valuations.
The technology-heavy Nasdaq index fell 5.5% on 5 November, erasing approximately US$2.5 trillion in the combined market value of its listed companies, the report said.
Other major Wall Street indices also recorded substantial losses, while the sell-off spread to Asian and European markets on Friday.
The seven leading US technology companies, collectively known as the “Magnificent Seven”, reportedly lost more than $1 trillion in combined market value.
Among them, chipmaker Nvidia saw its shares plunge more than 9%, while Tesla fell nearly 11%.
The report also cited an 8% decline in the valuation of Elon Musk’s SpaceX, although the privately held company is not publicly traded. It claimed that the combined value of Musk’s companies had fallen by more than $300 billion.
Asian markets were particularly affected because of their heavy exposure to technology and semiconductor companies.
Japan’s Nikkei index reportedly closed 6% lower on Friday, with semiconductor-related companies, including Kioxia and Tokyo Electron, suffering sharp declines.
In South Korea, chipmaker SK Hynix saw its shares fall more than 10%, while the benchmark Kospi index lost 6%.
European markets also opened lower on Friday, although the declines were comparatively modest because of their lower concentration of technology stocks.
The UK’s FTSE 100 index fell 1.6% in early trading, while Germany’s DAX declined 1.3%.
Analysts attributed the market volatility partly to growing uncertainty over the profitability of massive investments in AI infrastructure and technology.
Dan Coatsworth, head of market research at AJ Bell, said investors were increasingly questioning when the substantial capital committed to AI would generate returns and whether companies could deliver the profits anticipated.
He also pointed to the potential regulatory implications of the Democrats’ gains in the US midterm elections.
According to Coatsworth, greater Democratic influence could slow the construction of data centres and lead to stricter regulation of AI technologies, adding to uncertainty for investors.
He said the AI sector’s rapid growth had largely depended on continued technological advances, but concerns were emerging that the pace of progress could slow.
Such uncertainty over future profitability was weighing on technology company valuations and contributing to broader stock market volatility.