On 4 November 2026, the Democratic Party was reported to have won a landslide in the U.S. midterm elections, and the Nikkei 225 fell more than ¥3,000 at one point, approaching a break below ¥60,000. It subsequently turned higher, while concern over AI regulation affected market sentiment.
On 4 November 2026, as votes were being counted in the U.S. midterm elections, reports of a Democratic landslide sent the Nikkei 225 down more than ¥3,000 at one point, bringing it close to breaking below ¥60,000. Concerns about the outlook for AI investment were cited as one factor.
Democratic candidates were reported to have pointed to the large amounts of power and water consumed by AI data centers and called for tighter regulation. This heightened concern that a slowdown in AI investment could affect the earnings of Japanese semiconductor, equipment and materials manufacturers.
One market participant said, "The blue wave was larger than expected, but the market is overreacting." The Nikkei 225 bottomed in the latter half of the session on the 4th, closing down 1.42% from the previous day. Some observers also believe that President Trump's declaration of victory provided reassurance and changed the direction of the market.