South Korea halted trading after a massive US tech selloff sent stocks in Japan and Taiwan plunging

Asian stock markets plunged on Friday, extending a massive technology-led selloff on Wall Street that sent major indexes tumbling and forced a temporary trading halt in South Korea.

The turmoil began on Wall Street on Thursday, when a massive selloff was triggered by fears that the Democrats' midterm election victories could derail US President Donald Trump's ambitious AI investment drive.

The Democratic Party secured majorities in both the House of Representatives and the Senate in Tuesday's elections, wresting control of Congress from the Republicans. Candidates campaigning against new data center development also won gubernatorial races in Texas and Georgia, two states that have long offered tax incentives to attract technology investment.

Newly elected governors in states accounting for roughly 40% of planned US data center capacity promised to halt or pause construction, Bloomberg reported on Thursday.

The shockwaves quickly reached Asia, where South Korea's benchmark Kospi index sank as much as 8.8% in early trading, triggering an automatic 20-minute trading halt designed to curb panic selling. Japan's Nikkei 225 plunged around 6%, while Taiwan's Taiex dropped more than 8%.

The rout hit some of Asia's biggest technology companies, particularly chipmakers that have benefited from the artificial intelligence boom. South Korean giants Samsung Electronics and SK Hynix suffered heavy losses, while shares of Taiwan Semiconductor Manufacturing Company (TSMC) also fell sharply.

"It is time for correction, but we feel that there may be some overreaction to the outcome of the midterm election," Jun Kwang-woo, chairman of the Seoul-based Institute for Global Economics, told Reuters.

The crash also wiped more than $18 billion off the combined fortunes of 22 of Asia's richest tech tycoons, according to Bloomberg's Billionaires Index. SoftBank founder Masayoshi Son suffered the biggest loss at $3.9 billion, while Samsung's controlling family saw its wealth shrink by around $2.5 billion.

On Wall Street, the tech-heavy Nasdaq Composite plunged 5.5%, wiping out an estimated $2 trillion in market value. The S&P 500 sank 4.4%, while the Dow Jones Industrial Average dropped 3.4%, marking the steepest US market decline since the turmoil triggered by Trump's tariffs in April 2025.

Semiconductor giants were among the hardest hit. Advanced Micro Devices (AMD) and memory chipmaker Micron plunged more than 17%, while Nvidia shed 9.3% and Broadcom lost over 10%.

The Philadelphia Semiconductor Index, which tracks major US-listed chipmakers, tumbled more than 12%. The rout also swept through major technology companies including Alphabet, Microsoft, Apple, Amazon, and Meta.

The AI sector had already come under pressure in October, when an estimated $2 trillion was erased from the Nasdaq-100. Investors have grown increasingly skeptical that massive spending on AI infrastructure will generate sufficient returns.

The Trump administration has touted more than $3 trillion in technology and AI investment commitments since January 2025, although much of the pledged funding has yet to be spent.

Asian markets recovered some of their early losses on Friday but still closed sharply lower. South Korea's Kospi finished down 6.02%, Japan's Nikkei 225 lost 5.96%, while Taiwan's Taiex shed 4.51%.