Following the U.S. midterm election results, the market fell, led by AI-related stocks, while the possibility of a shift of funds into non-AI stocks emerged as a focus toward the weekend. Next week, movements in U.S. long-term interest rates, earnings announcements by major companies and indicators such as U.S. CPI are expected to be the market's focus.
The Nikkei 225 fell sharply from the previous week and closed at ¥57,434.77 this week. Selling prevailed, led by AI-related and semiconductor stocks, while declines in U.S. semiconductor stocks and companies that reported weaker-than-expected earnings weighed on the market. In the latter half of the week, funds shifted into non-AI stocks in an apparent attempt to stem the decline, but the market sold off broadly toward the weekend, recording a drop of more than ¥4,300.
While the market had priced in gains by the Democratic Party, a candidate who campaigned on halting new data center development won the Texas gubernatorial election in a major Democratic victory. Concerns over tighter regulation of AI data centers could intensify, but long-term interest rates are beginning to decline, and a shift of funds into non-AI stocks could spread to the Tokyo market. The postponement of Anthropic's IPO has also been cited as a short-term risk factor.
A succession of domestic and overseas earnings announcements and economic indicators is due next week. In Japan, July-September earnings from companies including Orix, Mitsubishi Estate and Mitsui O.S.K. Lines will be concentrated, and strong earnings from non-AI companies could affect their share prices. In the United States, CPI, PPI and European and U.S. economic indicators are due, with interest-rate and inflation trends expected to affect the performance of AI-related stocks as well.