European and Asian stock markets fell sharply on Friday after a tech sell-off on Wall Street, according to the Guardian. The report links the drop to investor concern over AI, following the Democrats' decisive victory in the midterms.

The FTSE 100 in London fell as much as 2.35% in morning trading, to 10,528 points. It closed down 1%, after US stocks rose when Wall Street reopened. Germany's Dax fell 2%, France's Cac 40 dropped 0.8%, and Spain's Ibex lost 0.6%.

On Thursday, the Nasdaq had its worst day in 19 months, falling 5.5%. Chip stocks led the decline. SanDisk fell 22% and Western Digital fell 17%. The Vix, Wall Street's "fear index," rose more than 60%.

In Asia, Japan's Nikkei 225 sank 6% and South Korea's Kospi tumbled more than 6.5% on Friday.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Big worries are colliding – the build-out of datacentres looks set to slow, which risks shredding the spending spree underpinning the boom, right at the time that investors have become super nervous about returns on this massive investment."

On Friday, the S&P 500 rose 0.3% and the Nasdaq closed up 1%, recovering part of Thursday's losses. The gains followed a US jobs report showing the economy added 165,000 jobs in October and the unemployment rate fell to 4.1%.

Chris Beauchamp, chief market analyst at IG, warned that "with AI fears still prominent there is a risk that there is much more selling to come." He also cited a possible resumption of the Iran conflict and oil price movements as sources of nervousness.

Most indices remain up for the year. The Nasdaq Composite is up 6.35% since January but more than 10% below its peak. The FTSE 100 has gained almost 7.5% in 2026, though it sits more than 300 points below its July record.

Mohit Kumar, an economist at Jefferies, said he did not believe Thursday's losses marked "the start of the unwind of the AI trade." He said Democrats were unlikely to abandon AI investment because data centres create jobs.

Copper on the London Metal Exchange also fell, with three-month copper down 0.61% on Friday and on track for a 2.79% weekly drop. Craig Lang, a principal analyst at CRU, said copper prices were increasingly shaped by the AI market and "sentiment towards datacentre expansion."