Asia-Pacific markets fall, tracking Wall Street losses as AI stocks resume sell-off

Stock markets across the Asia-Pacific region ended lower on Friday, November 7, 2025, after a sharp downturn on Wall Street. The slide in the U.S. was mainly driven by a broad sell-off in major technology and artificial intelligence (AI) stocks, as investors began to worry that valuations had climbed too high. Japan’s Nikkei 225 index and South Korea’s Kospi both logged steep declines, and Australian shares also finished in the red.

Key Takeaways

• Japan’s Nikkei 225 index closed down 607.31 points, a drop of 1.19%.
• South Korea’s Kospi index fell 1.81%, or 72.69 points, to reach a two-week low.
• The sell-off followed a similar trend in the Nasdaq Composite, a U.S. index heavily weighted with technology companies, which had fallen 1.9% in its previous session.
• The main trigger was a retreat from AI-related stocks, including Nvidia, which dropped more than 4% amid growing talk of a possible “AI bubble.”
• Sentiment also weakened due to disappointing U.S. consumer data and reports of new government restrictions on sales of advanced AI chips to China.

The mood for investors was largely set by the U.S. market. On Wall Street, the S&P 500 index fell 1.1%, while the Dow Jones Industrial Average slipped 0.7%. Selling pressure was most intense in the technology sector, the same group that had driven much of the market’s gains throughout 2025.

It seems investors are beginning to take profits from the AI sector, which has seen extraordinary growth this year. Many analysts are now wondering whether prices have moved far beyond what companies’ actual performance can justify.

Several major names in AI saw notable declines. Nvidia, a key player in the global AI chip market, fell over 4%. Palantir, known for its data analytics work, also slipped. The weakness spread across the largest U.S. tech firms, pulling down Microsoft, Apple, and Alphabet as well.

This sell-off in the U.S. quickly rippled through Asian markets. In Japan, the Nikkei 225 finished the day at 50,276.37.

In South Korea, the Kospi index dropped 1.81% to close at 3,953.76. The losses there were concentrated in the technology sector. Samsung Electronics, the world’s biggest maker of memory chips, fell 1.31%, and SK Hynix dropped 2.19%. Both companies play crucial roles in the global AI hardware supply chain.

Australia’s S&P/ASX 200 index also declined, closing 0.7% lower at 8,769.70, marking its weakest level in six weeks. While the market mirrored the Wall Street downturn, local developments added pressure. Macquarie Group, one of Australia’s largest investment banks, saw its shares fall sharply after its latest earnings report disappointed investors.

Adding to the unease were fresh economic and geopolitical signals. The University of Michigan’s consumer sentiment index in the U.S. slipped to 50.3, well below expectations, suggesting that consumers remain cautious about spending. On top of that, reports surfaced that Washington plans to block Nvidia from selling certain scaled-down AI chips to China, reigniting concerns about trade tensions between the two countries.

Overall, the mix of stretched valuations, weaker sentiment, and renewed policy uncertainty left investors across Asia wary heading into the weekend.

Frequently Asked Questions (FAQs)

Q. Why did Asian markets fall on November 7, 2025?

A. Asian markets fell primarily because they were tracking a sharp sell-off that happened on Wall Street. The U.S. drop was caused by investors selling technology and AI stocks due to fears that their prices were too high (valuation concerns).

Q. What is the “AI bubble” concern?

A. The “AI bubble” refers to a belief that the stock prices of companies related to artificial intelligence have risen too quickly and too high, beyond what their actual profits or future earnings can justify. Investors worry this could lead to a market crash, similar to the dot-com bubble in 2000.

Q. Which AI stocks dropped on Wall Street?

A. Key AI-related stocks that fell included Nvidia, which dropped over 4%, and Palantir. The sell-off also affected all of the “Magnificent Seven” U.S. tech stocks: Nvidia, Apple, Microsoft, Amazon, Alphabet (Google), Meta (Facebook), and Tesla.

Q. How did Japan’s Nikkei 225 perform?

A. Japan’s Nikkei 225 index closed down 1.19%, or 607.31 points, ending the day at 50,276.37.

Q. What caused South Korea’s Kospi to fall?

A. The Kospi fell 1.81% to a two-week low. This was driven by the Wall Street tech sell-off and new concerns about U.S.-China trade tensions over AI chips. Major Korean tech stocks like Samsung Electronics and SK Hynix both declined.