Nikkei falls 3.6% as AI stocks and US midterms rattle Asia
In short
- Japan’s Nikkei 225 fell 3.6% to 60,835, its lowest since early May. South Korea’s Kospi lost 3.2%.
- The triggers: uncertainty over the US midterm elections (a risk of tighter AI regulation), a weak outlook from Kioxia and worries about AI valuations.
- At 6:45 a.m. gold is $3,960 an ounce (+0.5%) and Bitcoin about $76,500.
Asian stock markets fell on Wednesday morning, and technology and AI shares took the hardest hit. The Nikkei 225 is at its lowest level since early May.
What happened
According to the Associated Press, Japan’s Nikkei 225 fell 3.6% to 60,835, its lowest since early May. South Korea’s Kospi lost 3.2% (5,467), Taiwan’s Taiex 2.3% and Australia’s ASX 200 0.8%. Hong Kong’s Hang Seng (−0.2%) and the Shanghai Composite (−0.1%) barely moved.
Individual stocks fell harder: SoftBank Group dropped 8%, and memory-chip maker Kioxia fell 10.8% after guiding October–December below expectations.
Two explanations come from the US. The first is the midterm elections. ATFX Capital reports that Democrats won early Senate races, while several key contests are still undecided. Some investors think a Democratic Congress could bring more regulation of artificial intelligence. President Trump would still hold a veto, and Wall Street generally prefers divided government, AP writes.
The second is the valuation of AI stocks. On Tuesday the S&P 500 closed up 0.4% (7,569), even though most of its stocks fell. The Nasdaq Composite added 0.8% and the Dow Jones lost 0.4%. Apple fell 1.9% despite better-than-expected profit and revenue, as memory costs for AI data centers squeeze its margins. The 10-year Treasury yield is 4.96%, from 4.91% late Monday.
HawkValue data at 6:40 a.m. Sofia time show the Nikkei 225 at 60,294 (−4.4% in 24 hours), below the level in the AP report. Brent crude is about $103 a barrel (−0.5%).
What it means for you
The maths: if you hold $5,000 in a fund that tracks the Nikkei, a 4.4% daily drop is about $220. The risk is highest in concentrated portfolios, where a few AI names carry a large weight in the index.
Gold did not follow equities. At 6:45 a.m. an ounce costs $3,960 (+0.5% in 24 hours), and the cheapest 10g bar is $1,303 (BGASC). $1,000 buys about 10g of gold at that bar price.
For context: according to Edward Jones, the S&P 500 has been higher six months after every midterm election since 1970. That is a statistic, not a forecast, and it does not cover Asian markets.
See also: live stock prices and US gold prices.
Bottom line
Asia is reacting to political uncertainty and to worries about AI valuations, not to new economic data. The election results will show whether the selling continues, while gold is almost unchanged.
Sources: Associated Press · ATFX Capital · HawkValue data at 6:40 a.m.
For information only. This is not investment advice.
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