Japan’s Nikkei 225 fell more than 4% on Wednesday as US midterm election results rattled investors across Asia, with artificial intelligence-linked and semiconductor stocks leading the losses.
The benchmark closed its morning session at 60,835.36, down 2,246.50 points or 3.56%, after touching a low of 60,799.11 earlier in the day, according to market reports. Losses then extended past 4% in afternoon trade, Kyodo News reported, while the Wall Street Journal put the slide at 4.2%, hitting a five-month low.
AI and chip stocks lead the fall
The selling was concentrated in names tied to the AI trade. SoftBank fell about 7%, Advantest 6.4%, Tokyo Electron 5% and memory-chip maker Kioxia 10%, market reports said. Of the 225 stocks in the Nikkei, 130 fell and 95 rose in early trade, suggesting investors were targeting AI-exposed names rather than selling Japanese equities across the board.
The broader Topix index fell about 1.9% to around 3,860 in early trade, and around 2.5% in later updates. Japan’s markets were returning after a holiday on Tuesday, and stocks had already ended modestly lower on Monday.
Why midterms moved Asian markets
Investors were reacting to a string of Democratic victories in the US midterm elections, including flipped Senate seats in South Carolina and North Carolina. Market analysts cited concern that a decisive Democratic win could bring tighter rules for data-centre projects and greater regulatory scrutiny of technology companies, potentially slowing the AI infrastructure spending that has powered many Asian economies and markets this year.
The US dollar weakened to its lowest level in more than a month, while the 10-year US Treasury yield dropped to around 4.90%, its lowest since early September. US equity futures also sold off, with E-mini S&P 500 futures down about 1.1% and Nasdaq futures down around 2.0%.
Losses spread across Asia
South Korea’s Kospi fell 3.9%, Taiwan’s Taiex declined 3.2%, on track for its lowest level since late July, and the MSCI Asia Pacific Index slipped 1.3%. Australia’s S&P/ASX 200 fell around 0.5%, Hong Kong’s Hang Seng fell 0.5% and the Shanghai Composite eased 0.2% in early trade, while Singapore and New Zealand moved in opposite directions, with New Zealand bucking the trend higher.
Crude oil prices eased as rising expectations of a possible settlement between the US and Iran aided sentiment, while gold edged higher in early Asian trading.
What is still unknown
Wednesday’s session in Tokyo had not closed at the time of writing, so a final closing level for the Nikkei is not yet confirmed and is not stated here. The full scale of the Democratic gains, and whether they amount to the “blue wave” some traders feared, also remains unclear until more results are counted. Investors will watch the US market open and the remaining midterm counts for the next signal.
Related coverage: Democrats’ projected House win is covered in Democrats Win Back House Control in Midterms, Projections Say, and the late-October Asian sell-off in Asian Markets Slide as Nikkei and Kospi Fall Ahead of Bank of Japan Decision.
Frequently asked questions
How far did the Nikkei fall on November 4?
More than 4% in afternoon trade, according to Kyodo News, with the Wall Street Journal reporting a 4.2% slide to a five-month low. The morning session closed down 3.56% at 60,835.36.
Why did Asian stocks fall?
Investors reacted to Democratic gains in the US midterm elections, amid concern over tighter regulation of technology and data-centre spending, which could slow AI infrastructure investment.
Which stocks fell most?
AI-linked names led the losses, including SoftBank (about 7%), Advantest (6.4%), Tokyo Electron (5%) and Kioxia (10%).
Sources
- Wall Street Journal — Asian Stocks Fall as Democrats Lead U.S. Midterms
- Kyodo News — BREAKING NEWS: Nikkei stock index extends losses, down over 4% (Nov 4, 2026)
- TradingView / dpa-AFX — Asian Markets Trade Mostly Lower (Nov 4, 2026)
- InvestingLive — Nikkei drops 3% as Democratic midterm gains hit AI and chip stocks (Reuters-based)
- Bloomberg via Swissinfo — Stocks Slide With Dollar on Rising Blue-Wave Bets: Markets Wrap (Nov 4, 2026)
FILE PHOTO captions: featured and body images are file photos of Tokyo’s stock exchange and the Bank of Japan, not photographs of the November 4 trading session.
