Nikkei falls below 60,000 and enters bear market as AI stock selloff spreads to Asia

[Update, Nov. 7, 2026, 13:30 JST] We have added the Nikkei's Nov. 6 close, which this article first said had not been confirmed, after checking it against market data.

A steep drop in semiconductor stocks in the United States on November 5 reportedly spread to Asia on November 6. According to Bloomberg, the Nikkei Stock Average fell below the 60,000 mark and entered a bear market (a decline of more than 20% from its recent high). Interest rate moves were not a major factor in this selloff. Instead, the selling was reportedly triggered by pledges from US state governors to halt the construction of new data centers, a factor specific to AI stocks.

What it means for Japanese companies: People who hold Japanese or US equity investment trusts through the new NISA accounts or corporate pension plans will see a visible drop in the value of their assets. For companies that sell power cables, transformers, cooling equipment, chipmaking equipment and electronic components to US data centers, the news bears on the outlook for orders. It is worth watching whether state construction halts actually spread, alongside trends in orders from customers.

What has been reported

The figures in this article are based on the headlines and summaries of media reports. The full text of the original articles has not been verified.

First, the United States. Euronews reported that the November 5 fall in US chip stocks was the biggest since 2020. The Washington Post reported that the day's decline wiped out the gains US stocks had built up since the midterm elections.

Next, Asia. In Tokyo trading on November 6, the Nikkei fell below 60,000 (Bloomberg). One report said the Nikkei fell 5.96% (FinChannel). CNBC highlighted selling in stocks closely tied to AI capital spending, including SoftBank Group and South Korea's SK hynix and Samsung Electronics.

The Nikkei closed at 57,434.77 on Nov. 6, down 5.96% from 61,077.90 the day before. When it hit its high has not been confirmed from primary sources for this article. The characterization that it has entered a bear market is the assessment of media reports.

Why governors, not interest rates

When stock prices collapse sharply, a sudden rise in interest rates is often the trigger. What stands out in the reports this time is anxiety about the data centers that handle AI computing themselves. A Euronews headline also cited "AI data center fears" as the reason for the decline.

The United States held midterm elections on November 3. Around that time, moves to halt new data center construction have been reported at the state level, including in Texas, Georgia and Ohio. Data centers consume large amounts of electricity and water, and there had been growing backlash over their pushing up local electricity bills. If governors pledge to halt construction, the plans of buyers of AI chips are thrown into doubt. That, in turn, undermines the future revenue outlook of companies that sell chips and memory, or so the reasoning goes.

The industry had also been wary of local opposition. Axios reported on November 1 that after the election OpenAI would rebrand data centers as "AI compute campuses" and begin lobbying for "community compacts" between states and localities. This selloff shows that local opposition has become a factor in stock prices.

How it spread to Asia

Asian markets are home to the suppliers of parts and capital that underpin US AI capital spending. South Korea's SK hynix and Samsung sell large volumes of memory for AI. SoftBank Group is deeply involved in its investment in OpenAI and in large data center projects.

If data center construction stops in the United States, the assumptions behind these companies' earnings change. The Nikkei is heavily influenced by the moves of large-cap stocks tied to AI and semiconductors, so a drop in US chip stocks tends to feed directly into a decline in the Tokyo index.

What to watch

First, SoftBank Group reports earnings on November 10. Attention will be on what it says about the outlook for its AI investments. On the same day, CoreWeave, the US company that rents out cloud computing for AI, also reports earnings. There have also been concerns about price moves in CoreWeave's bonds.

NVIDIA reports earnings on November 17. That will be an opportunity to see whether orders from data center customers are changing.

On the state front, an audit of data centers being conducted by Texas is scheduled to conclude in December. Another question is how far the halts in Georgia and Ohio will spread. Whether the big cloud companies move construction sites outside the United States is also a focus.

Whether the US jobs report on November 6 changed the market's direction could not be confirmed for this article. Whether this decline ends as a temporary jolt or marks the start of a rethink of AI capital spending will first be tested by next week's earnings.