Japan's Nikkei drops 3% as Democratic gains in US midterms hit AI stocks

Japan’s Nikkei fell 3.1% to 61,127.9 by 0150 GMT on Wednesday, while the Topix was down 1.85% at 3.857.97, Business Recorder reported. Investors sold technology and chip-related shares amid concern that Democratic gains in the US midterm elections could bring tighter oversight of AI infrastructure and slow related investment.

Advantest shares lost 6.4%, Tokyo Electron fell 5%, and SoftBank Group declined roughly 7%; memory-chip maker Kioxia dropped 10%. Fibre-optic cable makers Fujikura and Furukawa Electric also slid 8.2% and 9%, respectively, as markets weighed possible election effects on AI spending, regulation and other policy areas. More than $1.48 billion had been wagered on the midterm elections in prediction markets, with signals pointing to increased expectations of a Democratic sweep of Congress.