STOCKS | Japan’s Nikkei Falls 4.2% as Possible Democratic Sweep Weighs on AI Shares

Japan’s tech-heavy Nikkei 225 fell 4.2% to 60,455.95 as early U.S. midterm results increased the prospect that Democrats could win both chambers of Congress, a scenario strategists had said would pressure AI stocks. According to Sina Finance, the TOPIX fell 2.8% to 3,819.54, while chip and AI shares including Taiyo Yuden, Kioxia and Furukawa Electric were among the weakest performers. Masahiro Yamaguchi, head of investment research at Sumitomo Mitsui Trust Bank, said global equities had begun pricing in the view that a Democratic advantage would weigh on AI-related stocks. He said Japan’s market, which was closed Tuesday for a holiday, appeared to see some delayed unwinding of AI-related positions after similar moves in overseas markets. Most voting had ended across much of the United States, and Democrats had made early progress in their bid to win congressional majorities. Kalshi put the odds of Democrats taking the House at about 99%, with the odds of winning the Senate described as similar.