European stocks plunge as US AI slowdown fears spread after Democrats’ midterm win

European stock markets fell sharply on Friday as a US tech rout spread across the Atlantic, with investor sentiment hit by fears that the Democrats’ midterm triumph could slow the AI industry’s build-out of datacentres. The sell-off on Wall Street on Thursday, which saw the Nasdaq composite index suffer its worst day in 19 months with a 5.5% slump, was followed by sharp falls in Asian stocks on Friday morning, and the pain carried through to Europe. In London, the FTSE 100 opened down 1.5%, or 166 points, at 10,615. AstraZeneca was the biggest faller on the index, down 2.8%, while IAG, the owner of British Airways and Iberia, fell 1.5% after missing profit forecasts in a trading update. Miners Antofagasta and Anglo American were also among the big fallers. Germany’s Dax index opened down 1.5%, France’s Cac 40 dropped 1.2%, and Spain’s Ibex was down 1.1%.

Tech sell-off intensifies as datacentre worries collide with investor nerves

Susannah Streeter, chief investment strategist at Wealth Club, said: “The tech sell-off has intensified, with the pain of the brutal sell-off on Wall Street carried straight through to Asia and knocking sentiment in Europe.” She added: “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.” Chip stocks led Thursday’s slump, with memory maker SanDisk tumbling 22% and hard drive maker Western Digital falling 17%. The Wall Street “fear index”, the Vix, jumped 61% to its highest levels since the early weeks of the Iran war. On Friday, Japan’s Nikkei 225 index sank 6%, and South Korea’s Kospi index tumbled more than 8% in early trading. Despite the sharp losses, most indices remain up for the year: the Nasdaq Composite is still up 4.6% since the start of January, though more than 10% below its peak, and the FTSE 100 has gained almost 6.9% in 2026, now trading more than 300 points below its record high set in July.