Stock markets across Europe and Asia recorded steep losses on Friday as concerns about the future of artificial intelligence investment fuelled a global sell-off that began on Wall Street.
The downturn followed a bruising session for US technology shares on Thursday, with investors increasingly worried that spending on AI infrastructure and data centres may slow. The market turmoil came shortly after Democrats secured major victories in the US midterm elections, raising questions about the political and economic outlook.
In London, the FTSE 100 fell 1.5 per cent, losing 166 points to open at 10,615. The index tracks the performance of major companies listed on the London Stock Exchange.
Pharmaceutical giant AstraZeneca led the early decline, dropping 2.8 per cent. International Airlines Group, the parent company of British Airways and Iberia, lost 1.5 per cent after reporting results below market expectations in a trading update. Mining companies Antofagasta and Anglo American were also among the biggest fallers.
Other major European markets followed the same direction. Germany’s Dax dropped 1.5 per cent, France’s CAC 40 declined 1.2 per cent, while Spain’s Ibex lost 1.1 per cent.
Susannah Streeter, chief investment strategist at Wealth Club, said the technology sell-off had intensified as losses on Wall Street spread through Asian markets and weakened investor confidence in Europe.
She identified growing uncertainty over data centre construction as a major concern, warning that a slowdown could undermine the heavy spending that has supported the recent AI boom. Investors are also becoming increasingly anxious about whether the enormous sums committed to the technology will generate sufficient returns.
The Nasdaq Composite suffered its worst trading session in 19 months on Thursday, falling 5.5 per cent as technology shares came under intense pressure.
Companies producing computer memory and storage equipment recorded some of the steepest losses. SanDisk plunged 22 per cent, while hard drive manufacturer Western Digital dropped 17 per cent.
Market anxiety was also reflected in the Vix, Wall Street’s widely followed volatility gauge, which surged 61 per cent to its highest level since the early stages of the Iran war.
The sell-off spread across Asia on Friday, with Japan’s Nikkei 225 falling 6 per cent and South Korea’s Kospi losing more than 8 per cent.
Christopher Forbes, head of Asia and Middle East at CMC Markets, described the trading session as particularly damaging for investors. He said the sharp movements had triggered margin calls and complaints from clients who had held large positions in shares and stock market indices.
Forbes noted that the losses had been especially difficult for investors emotionally, as many had remained committed to their expectations about particular companies and market outcomes.
Chris Beauchamp, chief market analyst at trading platform IG, said Thursday’s decline marked a sharp reversal from the previous day’s performance. He warned that concerns surrounding AI could prompt further selling.
Beauchamp also pointed to continuing uncertainty over a possible return to conflict involving Iran. Investors, he said, were monitoring developments in the region and watching oil prices closely following their decline earlier in the week.
Despite the latest losses, most major stock indices remain higher than they were at the beginning of the year.
The Nasdaq Composite is still up 4.6 per cent since January, although it has fallen more than 10 per cent from its record high. London’s FTSE 100 has gained nearly 6.9 per cent in 2026 but is now more than 300 points below the peak it reached in July.
Mohit Kumar, an economist at investment bank Jefferies, said he did not expect US markets to recover quickly from Thursday’s losses. However, he rejected the suggestion that the decline necessarily marked the beginning of a sustained collapse in AI-related investments.
Kumar argued that AI spending remained an important contributor to US economic growth and that Democratic lawmakers were unlikely to abandon an industry supporting significant investment and employment.
He added that data centres and AI infrastructure projects were creating jobs, making it difficult for politicians to support policies that could push those opportunities to other states or countries.
The market turbulence has also affected industrial commodities, with copper heading towards its biggest weekly decline since March.
Benchmark three-month copper on the London Metal Exchange fell 0.61 per cent, putting it on course for a 2.79 per cent loss for the week.
Copper is widely used in semiconductor production, electronics and the automotive industry, making its price movements particularly sensitive to changes in expectations for technology investment and industrial demand.
Craig Lang, a principal analyst at consultancy CRU, said the metal’s price was becoming increasingly influenced by developments in the AI sector, particularly investor sentiment towards the expansion of data centre infrastructure.
Source: The Guardian
