The shockwaves of a Democratic “Blue Tsunami” sweeping both houses of the U.S. Congress sent the KOSPI plunging below the 5,000 mark during intraday trading on November 6. Fears have escalated that campaign promises made by winning Democratic candidates—such as regulations on AI data center construction—could put the brakes on Big Tech AI infrastructure investments and subsequently curb semiconductor demand. The spillover from the U.S. market downturn, triggered by the Blue Tsunami, battered Korean and broader Asian stock markets in a “Black Friday” scenario. While market volatility is expected to remain high in the near term, some analysts suggest a technical rebound could occur.

On this day, the KOSPI closed down 6.02% at 5,059.69. During the session, it plummeted over 8% at one point to hit 4,911.28, surrendering the “Five-Thousand-Pipi” (KOSPI 5,000) threshold for the first time in nine months since February 6 (when it hit an intraday low of 4,899.30). Although a late-session influx of buyers barely managed to defend the 5,000 line by the close, the index suffered a two-day cumulative drop of 10.98%. Compared to June 22, when it recorded its highest closing level of the year at 9,114.55, the index has tumbled 44.5% over roughly four months. Meanwhile, the Kosdaq index ended down 5.03% at 644.27.

In the main KOSPI market, a circuit breaker was triggered just three minutes after the opening bell, halting all stock trading for 20 minutes. In the Kosdaq market, program trading sell sidecars were triggered for the second consecutive day. Major Asian stock markets also experienced steep declines, including Japan’s Nikkei 225 (-5.96%) and Taiwan’s Weighted Index (-4.51%).

The “AI bubble” anxiety sweeping global markets was decisively ignited by AI data center regulation rhetoric from victorious Democratic candidates, notably Texas Governor-elect Gina Hinojosa. During the election, Hinojosa campaigned on a pledge to temporarily halt the construction of new data centers. Reaffirming her stance after the victory, she stated, “Development of ongoing data centers must be suspended until protective measures for residents [in rural communities] are established.” According to IT media outlet Silicon Report and others, Texas has been widely dubbed the “capital of the U.S. AI data center development boom” and an “AI oasis.”

Meanwhile, U.S. President Donald Trump took to Truth Social on November 6 (local time) to describe the AI industry as “gold,” pushing back against the AI regulatory stance held by some Democrats. On November 5, he blamed the recent stock market plunge on the argument that “stupid Democrats won big in the midterm elections.”

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