Artificial intelligence chipmakers and infrastructure firms dropped sharply in the days following the United States midterm elections on November 9, 2026, after Democrats won both chambers of Congress to deal a political setback to Donald Trump.
The election results reflect voter dissatisfaction with the war in Iran and presidential tariffs that pushed up consumer prices, alongside a backlash against the rapid expansion of domestic data centers. Market participants faced renewed uncertainty over regulatory headwinds and the timeline for returns on hundreds of billions of dollars in capital expenditure.
- Congressional Shift: Democratic control of both congressional chambers raises the prospect of tighter federal oversight on data center buildouts and AI infrastructure spending.
- Market Volatility: Following an initial severe correction on Wall Street, Asian indices recovered as regional investors weighed lower technology valuations against ongoing macroeconomic data releases.
- Macro Pressures: Strong October employment figures left markets pricing an 80% probability of a Federal Reserve rate hike at the December meeting, pending upcoming inflation reports.
Wall Street stabilized late last week after absorbing a severe correction on Thursday, paving the way for Asian markets to claw back losses at the start of the week. Tokyo, Seoul, and Taipei led the recovery as investors rotated back into heavily weighted technology holdings.
Japan’s Nikkei 225 gained more than 3%, driven by rebounds in Kioxia, Tokyo Electron, and Advantest. In South Korea, Samsung and SK hynix both advanced approximately 3%, lifting the Kospi index. Taiwan Semiconductor Manufacturing Company surged nearly 6%, pulling the Taiex up 5%.
Hong Kong and Shanghai posted solid gains, while Sydney, Wellington, and Manille drifted slightly lower. Market participants across the region weighed whether the bounce represented short-term bargain hunting or a lasting trend.
| Index / Exchange | Key Movers | Performance |
|---|---|---|
| Nikkei 225 (Tokyo) | Tokyo Electron, Advantest, Kioxia | Up >3% |
| Kospi (Seoul) | Samsung, SK hynix | Up ~3% |
| Taiex (Taipei) | TSMC | Up 5% |
Sally Auld of the National Australia Bank noted that investors would monitor markets closely to determine if the recovery stems from short covering or genuine demand. Regulatory scrutiny surrounding artificial intelligence, capital expenditure, and free cash flow reduction has weighed on sentiment in recent weeks.
These valuation concerns coincide with broader questions regarding monetary policy. Following an October employment report that exceeded consensus estimates for job creation, market participants anticipated upcoming consumer price index figures ahead of the Federal Reserve’s December policy meeting.
Concurrently, corporate governance questions emerged around Nvidia (NASDAQ: NVDA). The semiconductor titan confirmed it launched an independent investigation following reports that Chief Executive Jensen Huang had a relationship with a suspected Chinese spy.
The company stated that its board of directors has found no indication that corporate secrets or national security were compromised. Nvidia affirmed that Huang remains committed to leading the enterprise through the current market cycle.
