Global stocks slipped on Tuesday as a fresh bout of anxiety over artificial intelligence spending collided with uncertainty over the US midterm elections, with voting under way across the United States.
The pressure was sharpest in Asia’s technology-heavy markets. South Korea’s Kospi benchmark fell 3.6%, while Taiwan’s index dropped 3.6% for its steepest one-day decline since late July. The pan-European STOXX 600 index was down 0.6% to 645.36 points, and MSCI’s gauge of stocks across the globe slipped 0.26%.
US futures pointed to a cautious open. Futures tracking the tech-heavy Nasdaq-100 index were broadly flat, while S&P 500 contracts dropped 0.14%, after the indexes fell for a third straight session on Monday.
Big Tech earnings disappoint
The sell-off has a clear trigger: disappointment with big technology companies. Lacklustre earnings and steep capital spending targets have unnerved Wall Street in recent days, raising doubts about whether the hundreds of billions of dollars pouring into AI data centres will generate returns quickly enough to justify current valuations.
Apple deepened the gloom on Monday, forecasting lower gross margins for the crucial holiday quarter, citing rising memory-chip costs, and projecting services revenue growth that fell well short of Wall Street expectations.
Midterms add a second layer of uncertainty
The midterm elections add a second layer of uncertainty. Traders on Polymarket see about a 77% chance of Democrats winning both chambers of Congress, an outcome that could lead to tougher oversight of AI and more corporate regulation.
“In the case of a full blue sweep, I would expect some populist measures against AI. The narrative against data centres would get a tailwind,” said Alexander Lis, chief investment officer at Social Discovery Ventures.
A surprise Republican sweep would likely lift yields and the dollar, said Steve Englander, co-head of FX research at Standard Chartered. On Tuesday the dollar index dipped to 101.69, after hitting a one-month low on Monday, while the yield on the US 10-year Treasury note rose 1.2 basis points to 4.9064%.
Oil rebounds, yuan weakens, crypto choppy
Oil moved the other way. Brent crude futures rose 1.6% to $106.44 a barrel, after whipsawing this week on conflicting signals from the US and Iran on ending the war in the Middle East. The US carried out strikes on Iran’s Qeshm Island in the Strait of Hormuz, a US official told Reuters on Monday, while US President Donald Trump had said a deal to end the war “could happen”.
Elsewhere, the Chinese yuan weakened against the US dollar after the People’s Bank of China said it would raise the foreign exchange reserve ratio, a move aimed at slowing a long rally in the yuan. Cryptocurrencies remained choppy after last week’s Binance hack, with bitcoin nudging 0.1% lower to $76,638.66 and ether unchanged at $2,254.05.
What to watch next
What happens next depends on two things: the midterm results, and whether the selling stays concentrated in technology shares or spreads more widely. Monday’s mixed US close — the Dow up while the Nasdaq fell — suggested money rotating out of technology rather than fleeing shares altogether. If US technology stocks stabilise when results are known, Tuesday’s falls may look like a cooling of an overheated trade; if they do not, the story becomes one of broader risk reduction.
Sources
Reuters via Free Malaysia Today, “Global stocks slip as AI jitters, US midterms keep investors on edge”, 3 Nov 2026; Reuters via The Edge Malaysia, “Asian shares fall as AI-linked sell-off deepens ahead of US midterm elections”, 3 Nov 2026; Associated Press, “Asian shares are mixed as tech losses offset broader gains on Wall Street”, 3 Nov 2026.
Frequently asked questions
Why did stocks fall? Anxiety over artificial intelligence spending, after lacklustre big technology earnings and steep capital spending targets, collided with uncertainty over the US midterm elections.
What do the midterms have to do with it? Traders see about a 77% chance of Democrats winning both chambers of Congress, an outcome that could lead to tougher oversight of AI and more corporate regulation, while a surprise Republican sweep would likely lift yields and the dollar.
What should investors watch next? The midterm results, and whether selling stays concentrated in technology shares or spreads more widely.
