Nikkei enters bear market; Kospi falls 8% after AI rout

Asia cascade (Friday morning Asia / Thursday evening U.S.): Japan's Nikkei 225 entered bear-market territory — about 20% below its June peak — after falling as much as about 7% in Friday trade, CNBC and Bloomberg reported. South Korea's Kospi plunged more than 8% from Thursday's close, and the Korea Exchange halted Kospi trading for 20 minutes from 9:03 a.m. Seoul time, Yonhap reported — the exchange's tenth circuit-breaker trip this year. Nikkei Asia said the Nikkei also slipped below 60,000 for the first time since mid-May. Reuters said Taiwan's market was last down more than 8%, and European stock futures pointed about 1% lower.

Chip and AI names led both sessions. Fox Business said Nvidia closed Thursday down 9.26% at $181.60 and that the Philadelphia Semiconductor Index plunged more than 12%. CNBC said the "Magnificent 7" lost more than $1 trillion in aggregate market value, with Nvidia alone shedding more than $440 billion, and that Nvidia turned negative on the year (down about 2.6% year to date). In Asia Friday, CNBC said SK Hynix fell more than 8%, Samsung Electronics about 7%, SoftBank Group about 11.6%, Tokyo Electron nearly 9%, Advantest about 12%, and TSMC about 9.6%. After the U.S. close, CNBC said S&P 500 futures were down about 0.6% and Nasdaq-100 futures about 0.8%.

Investors tied the move to Democrats' midterm sweep and to doubts about AI spending. Numerous Democrats who won governor, Senate and House races have pledged to slow or halt AI data-center construction, NBC reported. Sen. Bernie Sanders, I-Vt., posted "National data center moratorium now" after local ballot wins, CNBC and Quartz reported. Trump wrote on Truth Social that the stock market suffered "one of the Worst Days in History based on the results of the Election," CNBC reported. Fox Business quoted eToro analyst Jakub Rochlitz saying markets are pricing midterm results and that "the AI infrastructure buildout will become slower and more expensive."

What the evidence shows: Midterm politics around data centers are a real driver, but they are not the whole story. NBC flagged weak Qualcomm and Arm results after the close Wednesday as the immediate spark for Thursday's open. Quartz, citing Color of Change's Nadine Smith, reported that even among Democrats a blanket national freeze is contested, and a presidential veto could still block a national bill. Treating the cascade as only a blue-wave story, or only an AI-bubble story, overstates either single cause. Circuit-breaker panics price fear of slower buildouts; they do not prove a U.S. law has passed.

Same-day industry response: While indexes fell, OpenAI published a "National Community Compact" for future company-owned data centers, saying it will solicit community input, publish construction plans, pay full electricity and infrastructure costs, and stop using nondisclosure agreements with public officials except for narrow security and trade-secret cases, according to OpenAI and CNBC. Meta President Dina Powell McCormick said at a Wall Street Journal tech conference that new U.S. data-center buildouts will be "very challenging," the New York Post and Washington Examiner reported.

Asia timeline (local Friday morning): Early Tokyo/Seoul open — Nikkei and Kospi gap lower with chipmakers leading. About 9:03 a.m. Seoul — Kospi >8% drop trips a 20-minute circuit breaker (Yonhap). Mid-morning — Nikkei prints session lows near 56,746 on Bloomberg's tally (~7.1%, ~20% below the June peak); CNBC calls a Nikkei bear market. U.S. evening — index futures stay soft into Friday's October jobs report.

Updated Nov. 5 ~7:05 p.m. PT with Friday Asia open (Thursday evening U.S. time). U.S. closes still from Fox Business's Nov. 5 table (Nasdaq −5.52% to 24,314.997; S&P −4.36% to 7,353.73; Dow −3.44% / −1,833.06 to 51,523.06). Mag7 −$1T and Nvidia >$440B from CNBC. Asia figures are intraday Friday morning and were still moving: Yonhap for the Kospi >8% circuit-breaker halt (20 minutes from 9:03 a.m. Seoul); CNBC for Nikkei bear-market call and chip-name moves; Bloomberg via Moneycontrol for Nikkei's session low near 56,746 (~7.1%) and ~20% below the June peak. Correction = ≥10% below the Oct. 6 Nasdaq record; bear market = ≥20% below the June Nikkei peak.