From Wall Street to Bitcoin: A wave of panic sweeps across markets

​Global markets have been hit by a wave of sell-offs. Tech giants are losing billions, stock indexes are plunging, and Bitcoin is falling sharply. Many blame the U.S. elections, but the real causes of the panic run much deeper.

Trillions of dollars wiped out in a single day

A massive sell-off began on Wall Street on Thursday, November 5. The Nasdaq Composite plunged 5.5%, recording its biggest one-day decline since April 2025. The S&P 500 lost 4.4%, while the Dow Jones Industrial Average tumbled 3.4%. The combined market capitalization of S&P 500 companies shrank by approximately $3 trillion.

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Technology companies were hit particularly hard. Nvidia shares fell 9%, AMD and Micron Technology plunged 17% each, and Tesla lost 10.8%. The combined market capitalization of the seven largest U.S. technology companies, known as the "Magnificent Seven," declined by more than $1 trillion.

Companies involved in building and operating artificial intelligence infrastructure also came under heavy pressure. Nebius shares dropped 15%, CoreWeave fell 10%, while data center operators Applied Digital, Cipher Digital, and IREN each lost more than 14%. The Nasdaq Composite entered correction territory, falling nearly 12% from its record high reached on October 6.

On Friday, November 6, the sell-off spread to Asian markets. Japan's Nikkei 225 dropped nearly 6%, entering bear market territory. South Korea's Kospi plunged more than 8% in early trading, forcing the exchange to halt trading for 20 minutes. By the close, its losses had narrowed to approximately 6%. Taiwan's Taiex ended the session down 4.5%, after also falling more than 8% earlier in the day.

Asian chipmakers and AI equipment manufacturers suffered some of the steepest losses. South Korea's Samsung Electronics and SK Hynix fell approximately 6% and 9%, respectively. Taiwan's TSMC closed down 4.7%, while Japan's SoftBank Group and Kioxia lost around 11% each.

European markets have so far held up better than their U.S. and Asian counterparts. On the morning of November 6, Euro Stoxx 50 futures were down approximately 1%, while futures on British and German stock indexes declined 0.9% and 0.8%, respectively. Meanwhile, the pan-European Stoxx 600 remained up more than 1.3% for the week, supported by banking, healthcare, and industrial stocks.

Democratic victory exposes weaknesses in the AI industry

The main trigger for the sell-off was the Democrats' victory in the U.S. midterm elections on November 3. The party gained control of both chambers of Congress and won several key state races. Investors now fear that Democrats could introduce restrictions on the construction of data centers needed to support artificial intelligence.

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Some Democrats have already proposed specific measures. Senator Bernie Sanders called for a nationwide moratorium on data center construction. Representative Yassamin Ansari proposed pausing AI development. Texas is particularly important, accounting for 27% of planned U.S. data center capacity. Governor-elect Gina Hinojosa has pledged to freeze approvals for new projects until legislation protecting local residents is adopted.

The opposition stems from data centers' enormous electricity and water consumption. Local communities fear higher utility bills and additional strain on infrastructure. According to UBS estimates, approximately 30% of planned U.S. data center capacity additions by 2028 could be at risk of construction delays.

However, political risks have only intensified problems that have been building in the AI industry for months. Technology companies are investing hundreds of billions of dollars in computing infrastructure, but investors are increasingly questioning whether these investments will pay off.

The market has begun reassessing overly optimistic expectations. William de Gale, a portfolio manager at Blue Box Asset Management, told CNBC that many financial models assume AI companies will achieve annual revenue growth of 30% for years to come. In his view, those forecasts will need to be reduced to 15–20% as the industry faces shortages of equipment, electricity, and skilled workers.

Bitcoin falls as investors seek safe havens

The panic also spread to the cryptocurrency market. On Thursday, November 5, Bitcoin fell below $76,000, losing more than 5% in 24 hours. According to CoinGlass, cryptocurrency exchanges liquidated positions held by nearly 200,000 traders over the past day, with total liquidations exceeding $1 billion. Approximately $924 million involved long positions — bets on rising cryptocurrency prices.

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Investors began shifting money into safe-haven assets. Demand for government bonds in the U.S., Japan, and China increased, pushing their yields lower. The yield on 10-year U.S. Treasury bonds fell to approximately 4.8%. The U.S. dollar, Japanese yen, and Swiss franc strengthened. Meanwhile, gold, which typically rises during market turmoil, lost around 1% on the morning of November 6 as some investors sold the precious metal to cover losses on other assets.

The situation in the Middle East poses an additional threat. Bob McNally, CEO of Rapidan Energy Group, told CNBC that he estimates an 80% probability of renewed U.S. military strikes against Iran. He expects another escalation to push both Brent and WTI crude prices above $100 per barrel. This would increase inflationary pressure and make it more difficult to lower interest rates.

What lies ahead for global markets after the crash?

What happens next will depend not only on decisions by U.S. politicians but also on the financial performance of technology companies. If data center construction slows while AI spending continues to grow faster than profits, investors will have to reassess the valuations of companies that were recently considered the market's biggest winners. High interest rates and a potential rise in oil prices could add further pressure.

However, the massive sell-off does not necessarily signal the beginning of a prolonged crisis. Demand for AI technology remains strong, and some analysts believe the decline in stock prices has been excessive. The biggest change is in investors' attitude toward risk: faith in the AI industry's endless growth is no longer enough. Companies will now have to prove that the hundreds of billions of dollars invested in them can generate real profits.