European stocks opened lower on Friday as the sell-off in US chip stocks spread to Asia and Europe. In early trading, the Stoxx Europe 600 was down 1.2%, Germany’s DAX lost 1.6%, and France’s CAC 40 and London’s FTSE 100 both dropped 1.4%.
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The MSCI AC Asia Index fell more than 4% as a sell-off in AI and chip stocks spread from Wall Street to Asia. However, US futures point to a pause in the sell-off, with futures on the tech-heavy Nasdaq-100 up 1.5% at around 10:15 CET.
Investors are weighing whether Democrats’ sweeping wins in this week’s US midterm elections could lead to tougher rules on new data centres. The projects have drawn opposition from voters across the political spectrum, and many candidates who won pledged to slow or halt construction.
About 40% of planned US data centre capacity is in states where governors or governors-elect have pledged or already imposed a pause on new projects, according to market intelligence company Cleanview.
US Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez proposed a federal moratorium earlier this year.
The election results added to concerns about when companies will see a return on the hundreds of billions they have poured into AI. Higher borrowing costs have also raised questions about how quickly companies can build the data centres they need. A slowdown could weigh on US growth and dent demand for chips and electricity.
US chip stocks suffer worst day since 2020
The Philadelphia Semiconductor Index closed down 12.2% on Thursday, its biggest one-day fall since 2020. The drop left the index around 16% lower for the week through Thursday’s close. live.euronext.com
The Nasdaq Composite closed down 5.5%, the S&P 500 fell 4.4%, and the Dow Jones Industrial Average lost 3.4%. All three posted their steepest daily percentage losses since US President Donald Trump announced sweeping tariffs in April 2025.
Stuart Clark, a portfolio manager at Quilter, said the sharp falls showed how much the Nasdaq and S&P 500 depend on a handful of large technology and chip stocks. When those shares fall, they can quickly drag both indices sharply lower.
The sell-off also hit the fortunes of major tech billionaires. Nvidia CEO Jensen Huang’s net worth fell by $15.1bn (€13.5bn), while Elon Musk’s fell by $79.7bn (€71bn), according to the Bloomberg Billionaires Index.
Trump blamed Democrats for Thursday’s sell-off in a post on Truth Social, writing, “The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!”
Asian chip stocks slide
In Tokyo, Japan’s Nikkei 225 pared some of its losses to close 6% lower. Kioxia and SoftBank fell more than 10% during trading before closing down 8.7% and about 11%, respectively. Advantest dropped more than 8% during trading. South Korea’s Kospi closed down 6% after falling as much as 8.8%, triggering a 20-minute trading halt. Chipmaker SK Hynix closed down 10.4%, while Samsung Electronics ended 6.4% lower.
Taiwan’s Taiex closed 4.5% lower after falling more than 8% early in the session. Shares in chipmaker TSMC closed down 4.7% after falling nearly 10% in early trading. Elsewhere, Hong Kong’s Hang Seng was down about 1.1% at the midday break, while the Shanghai Composite closed down 1.1% and Australia’s S&P/ASX 200 ended 0.5% lower.
Neil Wilson of Saxo Markets said the sell-off looked overdone but that investors would want to see markets stabilise first.
Amid concerns over the AI buildout in the US, Dutch bank ING is putting up for sale a roughly $500 million (€447mn) portfolio of data centre loans all at once, Bloomberg reported, citing people familiar with the matter.
At the European open, Brent crude futures traded at just under $99 a barrel as traders continued to watch for signs of progress after US and Iranian leaders indicated earlier this week that talks were advancing.
Government bonds rallied as investors sought safety during the stock sell-off. The US 10-year Treasury yield was down 6 basis points at 4.84%, while France’s 10-year yield fell 2 basis points to 4.77% and Germany’s slipped 3 basis points to 3.22% in the morning in Europe.
The dollar strengthened against the yen in early trading, while the euro fell 0.3% against the dollar to $1.1188 shortly after European markets opened. Spot gold fell 1.2% to $4,065 an ounce by 09:00 CET.
Additional sources • AFP&AP
Source: www.euronews.com
