Nikkei drops 6.1% to lowest point in six months

Tokyo's benchmark Nikkei 225 index fell 6.1% on Friday, dropping to 57,332.92. This decline pushed the index below the 60,000 point mark for the first time in nearly six months. Japanese technology stocks led the losses, with SoftBank Group Corp. and Advantest Corp. among the biggest decliners.

The global slide followed a heavy sell-off on Wall Street on Thursday. The S&P 500 dropped 4.4%, marking its worst single-day performance since U.S. President Donald Trump introduced his “Liberation Day” tariffs in April 2025. That Thursday loss erased the previous day's gain, which had been the best in three months. The Dow Jones Industrial Average sank 1,833 points, or 3.4%, while the Nasdaq composite tumbled 5.5%.

The Nasdaq, which holds many artificial intelligence and tech companies, is now 11.9% below its all-time high set last month. A loss of more than 10% is known as a correction. Investors are worried that the cost of building AI data centers may be too high. They also fear that AI stock prices have risen too far and are in a bubble.

In other Asian markets, South Korea's Kospi index dropped 6.3% to 5,042.65. Shares in Samsung Electronics and SK Hynix fell sharply. Australia's S&P/ASX 200 lost 0.5% to close at 9,020.80. Hong Kong's Hang Seng index fell 0.9% to 24,567.97, and the Shanghai Composite dipped 1.1% to 3,648.94.

Toyota Motor Corp. stock also fell after the Japanese automaker reported lower profits the day before. On U.S. markets, Nvidia, a major supplier of AI chips, fell 9.3%. This was the largest drag on the S&P 500. Nvidia is down 2.6% for the year, following annual gains of roughly 39%, 171%, and 239% in the previous three years.

Advanced Micro Devices tumbled 17.3%. CoreWeave, a cloud company that rents AI chips, fell 9.8%. GE Vernova, which helps power data centers, sank 7.5%. These stocks are major components of the index, so their moves have a large impact on overall market performance.

Tuesday's U.S. midterm elections added to the uncertainty. Democrats won key races, raising the possibility that governments might pause construction of new data centers. Voters from both parties have expressed concern about AI and higher power bills caused by data centers. A slowdown in construction would mean fewer purchases of AI chips, electricity, and other products that drive U.S. economic growth.

In the bond market, U.S. Treasury yields continued to fall. The yield on the 10-year Treasury dropped to 4.84% from 4.90% late Wednesday. It had been at 4.95% on election night and above 5.30% last month. Investors may be buying Treasuries as a safer option while stock prices fall. This happened even though fewer U.S. workers applied for unemployment benefits last week.

In other early Friday trading, benchmark U.S. crude oil rose 1.3% to $91.67 a barrel. Brent crude, the international standard, gained 1.7% to $99.93 a barrel. Uncertainty remains about the war with Iran and when the global energy industry will return to normal. The U.S. dollar rose to 157.93 Japanese yen, up from 157.68. The euro cost $1.1196, down from $1.1219.