Global AI Stocks React to U.S. Midterm Results
Incoming Democrats have pledged to rein in AI and data centers.
Global AI stocks experienced a significant reaction following the U.S. midterm elections, as Europe and Asia witnessed a plunge in stock markets on Friday. This came a day after Wall Street witnessed massive sell-offs, with investors fearing potential tighter tech regulations under a Democratic-led government. According to NBC exit polls, 57% of U.S. voters believed that AI posed more harm to society than good, and 56% of individuals considered AI advancement crucial or a major factor in their voting decisions.
Many Democratic candidates vowed to rein in AI development and limit data center construction, a promise that resonated with voters concerned about job creation, water usage, energy bills, and local pollution. Notably, several historically red states that host numerous data centers, including Texas, flipped to blue. Investors were thus worried, and on Thursday, the Nasdaq dropped by 5.52% (roughly $2.5 trillion), while the S&P 500 and Dow Jones fell by 4.36% and 3.44%, respectively.
All three index averages recorded their worst days since April 2025. Foreign markets mirrored this concern, with London's FTSE 100 sinking by 2.35%, Germany's Dax index dropping by 2%, France's Cac 40 decreasing by 0.8%, and Spain's Ibex falling by 0.6%. In the Indo-Pacific, Japan's Nikkei 225 index declined by 6%, and South Korea's Kospi index fell by over 6.5%.
However, the initial market panic seemed to ease as Wall Street began to recover on Friday from its mass sell-off, with the Nasdaq and S&P 500 rallying. This rebound might be partly attributed to a new U.S. Labor Department report on Friday, which indicated that the U.S. economy added 165,000 jobs in October. Meanwhile, Pope Leo XIV embarked on a 12-day tour of Latin America on Friday, just weeks after undergoing lung cancer surgery.
The trip, which involves delivering nine masses and 36 speeches across three countries, will test the Pope's health and stamina. Despite his health concerns, the Vatican maintains that Leo requires no special accommodations and will be accompanied by his usual delegation.
Written by urgent.news from Foreign Policy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
