Global Stock Market Crash: Global stock markets on Thursday (local time) witnessed a dramatic change, shifting from a strong rise to a sudden and massive crash in just a few hours. After a strong rally on Wednesday, markets plunged, wiping out around USD 2.5 trillion in value from US stocks in a single day. The sharp fall was reportedly driven by growing fears over massive spending on artificial intelligence (AI), possible government restrictions on the industry and uncertainty following the US midterm election results.

AI Stocks Lead To Market Crash

According to Reuters, the panic quickly spread beyond Wall Street, hitting major Asian markets as well. The biggest pressure came from technology stocks, including companies linked to artificial intelligence. In recent months, investors have been pouring money into AI companies with expectations that the industry will grow rapidly. However, concerns have now started to emerge over whether such heavy spending on AI infrastructure and data centres will deliver the expected returns.

Concerns have grown further following the Democratic Party's victory in the 2026 US midterm elections, in which they won total control over Congress. This is due to the fear of the possibility of stricter regulations. At the same time, investors have also begun expecting a slower expansion of data centres. The Nasdaq Composite, which includes many major technology companies, plunged 5.5 per cent, recording its worst fall in 19 months. It also dropped 10 per cent below its recent record high, entering correction territory.

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Wider US Market Also Takes A Hit

Similarly, Nvidia shares fell 9.3 per cent, while SanDisk plunged 22 per cent, and Western Digital lost 17 per cent. Reuters further reported that the sell-off was not limited to technology companies. The Dow Jones Industrial Average dropped 1,833 points, or 3.4 per cent, to close at 51,868. The S&P 500 also recorded its worst single-day decline since April 2025.

All 11 sectors of the S&P 500 ended the day in the red. Shares of Caterpillar fell 6.4 per cent, JPMorgan Chase dropped 4.2 per cent, while UnitedHealth and 3M also recorded losses of more than 3 per cent. The panic also spread to the Asian stock markets on Friday, with Japan's Nikkei falling 6 per cent and South Korea's Kospi dropping more than 8 per cent in early trading.

Trump Blames Democrats

As the markets recorded sharp decline, US President Donald Trump blamed it on the Democrats' strong performance in the midterm elections. He argued that the election results had triggered the fall, warning that investors' retirement savings had also taken a hit.

He wrote on Truth Social, "The Stock Market suffered one of the Worst Days in History based on the results of the Election. Such a sad thing to watch! It took so much work to get us to a level that no one has ever seen before, and then this. Your 401(k)s have, therefore, dropped. Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN! President DONALD J. TRUMP."

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