TOKYO: Japan's stock benchmark tumbled more than 6 per cent after trading opened Friday, and other Asian stocks also declined following a widespread sell-off of issues related to artificial intelligence on Wall Street.

Tokyo's benchmark Nikkei 225 recouped some of those initial losses, trading 5.7 per cent lower at 57,576.63 by midday. Australia's S&P/ASX 200 lost 1.0 per cent to 8,973.00. South Korea's Kospi dropped 7.4 per cent to 4,985.99, as Samsung Electronics shares shed 7.9% in morning trading. Hong Kong's Hang Seng fell 0.7 per cent to 24,630.03, while the Shanghai Composite dipped 1.3 per cent to 3,642.10.

Stock markets around the world have been feeling pressure from continued declines for companies that have benefited from the boom in the artificial-intelligence technology industry. Such stocks have been swinging for months on worries that the construction of AI data centres may slow because of how expensive it's become to borrow money. Critics also say AI stock prices had shot too high and were in a bubble.

Toyota stock declined sharply after the Japanese automaker reported lackluster profits the previous day. Nintendo, which also reported earnings the previous day, saw its stock price fall amid the overall market tumble. Sony Group stock fell slightly. The company reported booming results on the back of the success of its latest Spider-Man movie.

On Wall Street, the S&P 500 fell 4.4 per cent Thursday for its worst day since US President Donald Trump shook markets worldwide in April 2025 with his “Liberation Day” tariffs. The wipeout more than erased the US stock market's gain from the day before, which was its best in three months.

The Dow Jones Industrial Average sank 1,833 points, or 3.4 per cent, while the Nasdaq composite tumbled 5.5 per cent. The Nasdaq, which is full of AI-related and other tech stocks, sank 11.9 per cent below its all-time high set last month. Stock geeks call a loss of more than 10 per cent a “correction.”

Tuesday's US midterm elections added another challenge. The nationwide victories for Democrats raised the possibility that governments could force pauses in construction of more data centres. Voters across political parties say they're wary about AI and don't like the increases to power bills caused by data centers.

Any slowdown in construction of AI data centres would mean fewer purchases of AI chips, not to mention electricity and other products and services that are getting vacuumed up in the AI frenzy, which is driving much of the US economy's growth.

Nvidia, the chip company that quickly became the face of the AI boom, fell 9.3 per cent and was by far the heaviest weight on the S&P 500. It's now down 2.6 per cent for the year so far following annual gains of roughly 39 per cent, 171 per cent and 239 per cent in the last three years.

Advanced Micro Devices tumbled 17.3 per cent. CoreWeave, a company that rents access to AI chips to customers over the cloud, fell 9.8 per cent. GE Vernova, which has been helping to power data centers, sank 7.5 per cent.

Compounding the pain for investors, AI chip stocks are some of Wall Street's most influential because they've become some of the largest. A 1 per cent move for Nvidia, for example, has more effect on the S&P 500 than a 1 per cent move for nearly any other US stock.

Stock prices tend to follow where corporate profits and interest rates go over the long term, depending on them much more than on who controls what in Washington.

All told, the S&P 500 fell 334.89 points to 7,353.73. The Dow Jones Industrial Average dropped 1,833.06 to 51,523.06, and the Nasdaq composite sank 1,421.52 to 24,315.00.

In energy trading, benchmark US crude added 0.65 per cent to USD 91.11 a barrel. Brent crude, the international standard, gained 1.4 per cent to USD 99.73 a barrel. Uncertainty still reigns about what will happen in the war with Iran and when the global energy industry can return to normal.

In the bond market, Treasury yields continued to tumble Thursday. The yield on the 10-year Treasury fell to 4.84 per cent from 4.90 per cent late Wednesday. It had been at 4.95 per cent on election night and above 5.30 per cent last month. That could be a signal that investors are herding into US Treasury bonds in search of something that's safer to own as stock prices tumble.

The drop in yields came despite some encouraging reports on the US economy. Fewer US workers applied for unemployment benefits last week.

In currency trading, the US dollar rose to 157.97 Japanese yen from 157.68 yen. The euro cost USD 1.1209, down from USD1.1219.