European Stocks Slide as AI Jitters and US Tech Drop Spread Globally

European stock markets opened lower on Friday as a sell-off in United States technology stocks extended its reach across the Atlantic. The decline followed a volatile session on Wall Street where the Nasdaq share index recorded its steepest drop in 19 months. The index plunged by 5.5% on Thursday, a move that signaled deep concern among investors regarding the future of artificial intelligence spending.

The anxiety over the AI sector intensified after the Democratic Party secured victory in recent midterm elections. Analysts are now questioning the trajectory of AI-related investment in light of the new political landscape. This shift in power has introduced uncertainty about how infrastructure and regulation will evolve, leading to a reassessment of riskier assets globally.

Asian markets absorbed the initial shock on Friday morning. Japan's Nikkei 225 index sank by 6% during early trading hours. South Korea's Kospi index fell by more than 8% in the same period. These sharp declines mirrored the previous day's losses in the United States and set the tone for trading in Europe.

In the United Kingdom, the FTSE 100 index opened 1.5% lower, representing a drop of 166 points to close at 10,615. AstraZeneca was the worst performer on the index, with its shares opening down 2.8%. International Airlines Group, the parent company of British Airways and Iberia, also fell 1.5% after missing profit forecasts in a recent trading update. Mining companies Antofagasta and Anglo American saw similar declines in their share prices.

The sell-off was not confined to London. Germany's Dax index opened 1.5% lower, while France's Cac 40 dropped by 1.2%. Spain's Ibex index lost 1.1% of its value. Susannah Streeter, chief investment strategist at Wealth Club, noted that the pain from Wall Street was carried straight through to Asia and then to Europe. She identified the potential slowdown in datacenter construction as a key factor threatening the current spending boom.

Chip manufacturers led the recent slump in the US market. SanDisk, a memory maker, saw its shares tumble by 22%, while Western Digital, a hard drive manufacturer, fell by 17%. The Vix, a measure of market volatility often called the fear index, jumped by 61%. This spike pushed volatility levels to their highest point since the early weeks of the Iran war.

Despite the sharp losses this week, most major indices remain in positive territory for the year. The Nasdaq Composite is still up 4.6% since the start of January, though it is currently more than 10% below its recent peak. The FTSE 100 has gained almost 6.9% in 2026 to date but is now more than 300 points below the record high it set in July.

Traders are adopting a cautious approach as they weigh the immediate impact of AI slowdown fears against longer-term performance. The combination of high expectations for returns and the reality of slowing construction projects creates a challenging environment for investors. Market participants are monitoring further developments to determine if the current volatility will persist.