Panic on Wall Street: Artificial intelligence and chip markets "collapse" on global exchanges
The US stock market has recorded its most devastating crash in recent years. The high-tech Nasdaq index plummeted by 5.52% at once, while the Dow Jones, which unites industrial giants, lost more than 1,800 points (-3.44%).
As a result of this financial panic, described by Reuters and CNBC analysts as a "fire on the stock market," nearly $2 trillion in market capitalization vanished from the exchanges within a few hours.
The "massacre" of AI and microchip manufacturers
The main epicenter of the panic selling during the trading session was the artificial intelligence (AI) and semiconductor industry. The Philadelphia Semiconductor Index (SOX) collapsed by 12.25%, recording the second-worst result in the history of observations:
Nvidia: Shares of the company, which is the absolute leader of the AI revolution, fell by 9.26%, losing $374 billion in a single day;
Micron, AMD and Marvell: Securities of each of these chip manufacturers fell by 17%;
SanDisk: Collapsed by a record 22.26% in one trading day;
Losses of the "Magnificent Seven": The 7 largest US IT giants lost a total of nearly $900 billion in capitalization during a few hours of trading.
The Wall Street fear index (VIX) jumped at its fastest rate in the last two years — by more than 65%.
Why did investors start to flee?
This crisis occurred against the backdrop of the announcement of the results of the US midterm elections:
Gubernatorial race and new barriers: The victory of Democratic Party representatives in key states raised concerns among investors regarding environmental restrictions. In particular, strict restrictions are expected to be placed on the construction of data centers that consume enormous amounts of energy, which are necessary for artificial intelligence;
Crisis of speculative expectations: Financiers, realizing that the rapid expansion of artificial intelligence technologies might slow down, urgently began to re-evaluate risks. Many experts are calling this the bursting of an artificially inflated "AI bubble."
Consequences reached Asian markets: Flight and new risks
The panic in New York instantly spread to the Asia-Pacific region:
Japan: Following losses by high-tech exporters, the Nikkei 225 index collapsed by 4.01% at once;
Taiwan: Shares of TSMC, the world's largest chip contractor, fell sharply, dragging the TWII index down by 2.36%;
South Korea: The Kospi index lost 1.32% due to the decline in quotes of Samsung Electronics and SK Hynix.
Investors are looking for a safe haven:
Capital that exited the stock market was immediately directed toward protected assets. As a result, commodity prices on the global market rose — crude oil prices increased by 3–4%, while gold and silver are showing their strongest weekly growth rate not seen since the end of summer.
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