Asian share markets split sharply on Thursday as the political shockwave from the United States midterm elections reached trading floors across the region. While hopes of an end to the US-Iran war sent oil prices tumbling and lifted most broad indexes, the shares most closely tied to the artificial intelligence boom went the other way, with chipmakers and data-centre suppliers among the day’s heaviest fallers.
South Korea bore the brunt. Its chip-heavy KOSPI index slid 4% in morning trade, moving close to a seven-month low, as investors sold the semiconductor names that have powered much of the market’s recent strength. Taiwan’s benchmark fell 1.8%, and in Japan, suppliers of technology equipment dragged the Nikkei 0.5% lower. The selling was concentrated where it mattered most for the AI trade: the companies building, equipping and supplying the data centres on which the boom depends.
The trigger was political rather than corporate. Democratic candidates who campaigned, in part, on halting new data-centre construction won striking victories in Texas and Georgia, a sign that public unease about the scale, energy use and local impact of the AI build-out is hardening into electoral force. Markets read that as a warning that tougher regulation and slower permitting could follow, at least in the near term, even in states long seen as friendly to large technology projects.
Most analysts, however, do not expect the political shift to break the AI investment cycle outright. The prevailing view is that demand for artificial intelligence, data centres and computer chips will keep growing, but that the pace of expansion may cool for a time while companies and policymakers adjust to a tougher political climate. The scale of the Democratic victories caught many traders by surprise, and that surprise, rather than any single earnings result, drove Thursday’s re-pricing.
The other side of the market told a very different story. Brent crude dived nearly 9% overnight to fall below $100 a barrel, and has now dropped by about 20% so far this week. If that decline holds through Friday’s close, it would be the largest weekly fall in oil prices since April 2020, when US crude briefly traded below zero. In early Asian trading, Brent was testing its overnight lows at about $93.50 a barrel, as traders bet that a weakened President Donald Trump, facing a Democratic Congress, would be less likely to escalate the war with Iran.
Falling energy prices rippled through the rest of the market. Bond yields dropped, the dollar slid to a one-month low of $1.1273 against the euro, and broad share indexes climbed on the clarity of the election outcome: the S&P 500 closed 1.6% higher and European shares reached a two-month high. Solar supply-chain stocks jumped most of all, on expectations that a Democratic Congress will offer stronger support for renewable energy. The yield on benchmark 10-year US Treasuries fell 6 basis points overnight and by a further point in early Tokyo trade to 4.87%, while two-year yields eased about 2 basis points to 4.56%.
The politics behind the move were unusually explicit. Trump acknowledged on Wednesday that the war had played a role in the Republican defeat, and his vice president, JD Vance, was blunter still, writing on X: “The reason we lost is the war.” A negotiated end to the conflict would push oil prices lower still, easing inflation pressure and reducing the likelihood of further interest-rate rises — a prospect that helped bonds and most equities even as it hurt energy and AI-infrastructure shares.
Thursday’s session therefore captured two market stories at once: relief that a long and costly war might be nearer its end, and a fresh reckoning with the political costs of the AI boom. The first lifted almost everything; the second hit the sector that had led markets higher for so long. Whether the chip and data-centre sell-off proves to be a pause or the start of a deeper reassessment will depend on how far the new Congress pushes its scepticism of the AI build-out — and on whether companies can show that the vast sums being spent are turning into profits quickly enough to justify them.
Note: the featured image is a file photo of the Yeouido finance district in Seoul, taken in March 2024, not a photograph of Thursday’s trading.
Sources: Reuters, “Oil and data centre stocks sink after US midterms” (5 November 2026), https://www.reuters.com/business/energy/global-markets-global-markets-2026-11-05/
