Japanese and US stock markets plunged after the Democratic Party won a landslide victory in the US midterm elections. AI-related and semiconductor stocks were sold, and hedge funds appear to be turning risk-off toward year-end.
As reports emerged of the Democratic Party’s landslide victory in the US midterm elections, Japanese and US stock markets saw volatile trading. Market reactions remained difficult to predict in the days that followed, after US President Trump accepted the defeat. As investors’ risk appetite shifted, turmoil in the US market spread to Japan. AI-related stocks and semiconductor shares were sold in particular, while concern about economic conditions and policy developments spread.
In the Tokyo stock market on the 6th, the Nikkei Stock Average fell below the key ¥60,000 level, closing at ¥57,434, down ¥3,643 from the previous day. The market recorded a sharp decline in tandem with the plunge in US markets, with the size of the drop reaching the third-largest level ever. Moves in individual stocks varied by issue, suggesting that a risk-averse mood had intensified across the capital markets.
Market participants say selling in AI and semiconductor-related stocks pushed the market lower. Meanwhile, many believe that hedge funds and others seeking to lock in investment gains toward year-end are turning risk-off, and caution is being urged over the risk of the AI market’s reversal. Market conditions are expected to remain uncertain going forward, depending on policy developments and the release of economic indicators after the US midterm elections.