Trump blames voters for the stock rout as the selloff spreads to Asia and Seoul eases margin rules

President Trump said on Thursday night that voters had themselves to blame for the stock market’s historic sell-off¹. He spoke two days after Republicans lost the midterm elections in historic fashion¹.

US stocks suffered their worst rout since 2020, with the Dow plunging 1,800 points and the Nasdaq falling 5.5%². Technology shares had their biggest selloff since Covid, as investors saw an end to the AI data center boom¹¹, and a semiconductor index posted its worst sell-off since Covid¹². The blue tsunami wiped out $2.5 trillion from the Nasdaq⁷.

The selloff then spread to Asia. The KOSPI fell below 5,000 earlier on Friday⁴, and Seoul tweaked a margin loan rule to contain the selloff⁴. South Korea moved to avert forced stock sales as the Wall Street rout rattled markets³.

Why it matters to investors

The rout is reaching beyond stocks. Treasuries soared as the tech selloff stoked demand for havens, with the rush into government debt coming as the Nasdaq 100 plunged¹⁰. Japanese government bonds rallied sharply on Friday as traders pared expectations for a Bank of Japan rate hike⁶.

Asian fortunes took a hit. SoftBank Group founder Masayoshi Son and other tycoons across Asia lost a combined $18 billion as the chip stock rout spread⁵. Stocks in China and Hong Kong tumbled⁸, and the yuan was set for its first weekly loss in six weeks⁹. The People’s Bank of China set its daily midpoint at 6.7168 per dollar⁹.

The trigger is political. Global stocks slid as the Democrats’ election victory raised fears of a crackdown on AI spending⁸. One assessment held that Big Tech and hyperscaler capex should still easily exceed $1 trillion in 2027, but that the growth rate into 2028 will moderate significantly¹¹. Another analysis tied the expected moderation in 2028 to efforts by Democratic governors and state houses¹².

What to watch

Seoul’s measures are a first test. South Korea will closely assess how the shift in congressional power affects trade and industrial policy³, and its margin rule change⁴ will show whether forced selling can be contained.

Financing is a second. Concerns over funding have shadowed neocloud firms such as Nebius and CoreWeave since US interest rates climbed late in the summer⁷.

The third is the Fed. Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin signalled support for gradual rate increases even as the rout unfolded², while haven demand pushed Treasuries higher¹⁰.