Global equity markets in Europe and Asia tumbled on Friday following sweeping Democratic gains in the U.S. midterm elections, triggering a sharp international reaction to potential regulatory shifts in the artificial intelligence sector. Foreign indices dropped in tandem with a broader Wall Street sell-off, as foreignpolicy.com reported, driven by investor anxiety that Washington’s political shift could usher in tighter oversight for the technology industry.
Market Sell-Offs Spans Global Exchanges
The financial fallout rippled rapidly across international markets on Friday. In London, the FTSE 100 index sank by 2.35 percent, while Germany’s Dax index tumbled 2 percent and France’s Cac 40 decreased by 0.8 percent. Spain’s Ibex declined by 0.6 percent. Across the Indo-Pacific, losses were sharper: Japan’s Nikkei 225 index fell by 6 percent, and South Korea’s Kospi index dropped by more than 6.5 percent.
These international declines followed a severe contraction on Wall Street on Thursday. The Nasdaq dropped by 5.52 percent—erasing roughly $2.5 trillion—while the S&P 500 fell 4.36 percent and the Dow Jones declined by 3.44 percent. All three major U.S. averages recorded their worst single-day performance since April 2025, when U.S. President Donald Trump initiated a broad global trade war.
Market panic eased somewhat on Friday as Wall Street began to recover, with both the Nasdaq and S&P 500 rallying. That rebound coincided with a U.S. Labor Department report showing the national economy added 165,000 jobs in October.
Voter Sentiment and the Silicon Valley Lobbying Push
The market turbulence followed an election cycle where artificial intelligence emerged as a contentious ballot issue. NBC exit polls indicated that 57 percent of U.S. voters believed AI would cause more harm than good to society, with 56 percent calling the technology a crucial factor in their vote.
Capitalizing on voter apprehension, many Democratic candidates campaigned on promises to rein in AI development and decelerate the construction of power-heavy data centers. Ahead of Tuesday’s vote, local communities had raised persistent concerns regarding data centers’ heavy water usage, ballooning energy bills, local pollution, and limited long-term job creation.
Prominent Silicon Valley executives—including SpaceX CEO Elon Musk and OpenAI co-founder Greg Brockman—channeled more than half a billion dollars collectively into backing Republican candidates. Despite that financial backing, several historically Republican states hosting heavy densities of data infrastructure, such as Texas, swung blue.
