The week exposed a growing fault line in global markets: investors began questioning whether the enormous spending behind artificial intelligence can continue at its current pace without clearer evidence of returns. The resulting technology selloff spread across major markets, hitting semiconductor-heavy indexes particularly hard. Yet the performance was not uniformly negative: the Hang Seng advanced, France’s CAC 40 gained ground, and the Shanghai Composite finished higher, illustrating how regional market composition and local developments shaped the response.

Wall Street Reassesses the Cost of the AI Boom

U.S. equities ended the five-day period lower across all four major benchmarks in the supplied data. The Nasdaq Composite fell 3.37%, the S&P 500 declined 2.68%, the Russell 2000 lost 2.05%, and the Dow Jones Industrial Average fell 0.94%. The US Dollar Index moved in the opposite direction, gaining 0.52%. The sharper decline in the Nasdaq reflected the pressure on technology and semiconductor companies, whose valuations have been closely tied to expectations for continued AI-related investment.

The immediate catalyst was a reassessment of the AI infrastructure outlook following the U.S. midterm elections. Reuters reported that investors were concerned that a Democrat-controlled Congress could increase scrutiny of data-center construction and potentially slow investment. Weak Qualcomm results added to pressure on chipmakers. On November 5, the Philadelphia Semiconductor Index suffered a particularly severe decline, while the Nasdaq lost more than 5% in that session. Friday’s rebound in the Nasdaq and S&P 500 did not erase their weekly losses. The distinction matters: investors were not abandoning artificial intelligence as a long-term theme, but were questioning the pace, financing and commercial returns of the current spending cycle.

Asia’s Semiconductor Exposure Drives a Deep Regional Divide

Asia recorded the most dramatic divergence. South Korea’s KOSPI plunged 13.64% and Japan’s Nikkei 225 fell 9.25%. By contrast, Hong Kong’s Hang Seng Index gained 5.10%, while the Shanghai SSE Composite advanced 1.39%. The KOSPI’s decline was especially severe on November 6, when the index dropped 6.02% in one session and trading was temporarily halted after an intraday plunge. Samsung Electronics and SK Hynix, two major index constituents, fell sharply as investors reassessed the outlook for semiconductor demand and AI data-center investment. Reuters also reported substantial foreign selling in South Korean equities.

Japan faced similar pressure because of the Nikkei’s exposure to technology and semiconductor-related companies. The Hang Seng’s gain, meanwhile, shows that the regional selloff was not universal. Differences in sector composition, company exposure and local market dynamics produced sharply contrasting outcomes. China’s Shanghai Composite also advanced, providing a more resilient result than the major Northeast Asian technology-heavy benchmarks.

European and Israeli Markets Reflect Different Pressures

European performance was mixed. The DAX was nearly unchanged, gaining 0.01%, while the CAC 40 rose 2.13%. The FTSE 100 fell 0.52%, and MSCI Europe declined 0.61%. These figures suggest that the global technology shock did not translate into uniform losses across European markets. Sector composition and domestic factors remained important differentiators.

Israel’s TA-35 fell 2.90%, while the broader TA-125 declined 2.93%. The pressure became visible on November 5, when both benchmarks recorded substantial losses as Wall Street opened sharply lower. Globes reported declines in defense, technology, insurance and construction shares; Tower Semiconductor, Camtek and Next Vision were among the notable technology-related losers. The session also coincided with unusually high equity turnover linked partly to index rebalancing, meaning trading activity should not be attributed entirely to investor withdrawals. The figures point to broad market sensitivity to international technology weakness, although they do not establish a single cause for the full weekly decline.

AI Spending, Corporate Results and Market Confidence in Focus

The next test for global equities will be whether technology companies can provide convincing evidence that AI-related capital expenditure is translating into sustainable revenue and productivity gains. Investors will also monitor policy developments affecting data-center construction, semiconductor supply chains and energy infrastructure. In Asia, the scale of the KOSPI and Nikkei declines raises questions about whether selling pressure will stabilize or spread further. For Israel, the resilience of technology and defense companies, alongside developments in global markets, will remain important. The central issue heading into the next week is no longer simply how much companies intend to spend on AI, but whether the expected economic returns can justify that spending.