South Korea’s tech-heavy Kospi Index slid 8.8% in early trading, triggering a circuit breaker, with chipmakers Samsung Electronics Co. and SK Hynix Inc. both plunging more than 9%. Japan’s benchmark Nikkei 225 Stock Average lost 6.2%, while the MSCI Asia Pacific Index declined 2.9%.

Asian stocks slumped from the open after a post-election rout in chipmakers deepened on Wall Street amid growing concern that Democrats will seek tighter regulation of the artificial intelligence industry.

South Korea’s tech-heavy Kospi Index slid 8.8% in early trading, triggering a circuit breaker, with chipmakers Samsung Electronics Co. and SK Hynix Inc. both plunging more than 9%. Japan’s benchmark Nikkei 225 Stock Average lost 6.2%, while the MSCI Asia Pacific Index declined 2.9%. Futures pointed to losses in Taiwan, Hong Kong and China.

The S&P 500 Index plunged 4.4% on Thursday to mark its worst performance since the April 2025 tariff meltdown. The Nasdaq 100 slid 6.4%, wiping out $2.3 trillion in value as it capped its worst session since March 2020. A closely watched gauge of chip giants tumbled 12%, with Nvidia Corp., Qualcomm Inc. and Arm Holdings Plc among the biggest decliners. In a sign markets may be starting to stabilize, futures on the Nasdaq 100 Index gained 0.3%.

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“This is a ‘blue trade’ panic pricing in policy risk,” said Anna Wu, an investment strategist and founder of Floodlines Research, adding that there is “plenty of chip and equipment exposure still to unwind. Sentiment could weaken further until the chip side gets a reason to rally.”

Elsewhere, the dollar weakened against most of its peers in early Friday trade, while Treasuries held their gains from Thursday. US oil climbed above $91 a barrel after jumping 2.7% in the previous session.

Global financial markets have been whipsawed this week as investors initially bet that the Democratic sweep of Congress in the midterm elections would hasten an end to the Iran war, before that was overwhelmed by fears of tighter regulation of the data center industry. The Philadelphia Semiconductor Index has slumped almost 16% this week, putting it on track for its worst weekly performance since April last year.

Data center developers in Texas are facing their worst-case scenario under newly elected Democratic Governor Gina Hinojosa, who has called for an immediate moratorium on data center development. Hinojosa’s victory, combined with those of other Democrats in gubernatorial races, could leave half of proposed AI data center additions across the US vulnerable to stricter local scrutiny and pushback.