Democratic Sweep Rattles Trump AI Trades From Tokyo to Seoul

SoftBank dropped about 7% in Tokyo and South Korea's Kospi swung from a 3.2% gain at the open to a loss of as much as 4% intraday on Tuesday, as traders unwound positions built around President Trump's push for deregulation, tax cuts and rapid AI expansion. Democrats captured both chambers of Congress, Bloomberg reported, and the sweep sent the Nikkei down 3.1% with chip-equipment names leading the selling: Advantest fell 6.4%, Tokyo Electron slid 5% and Kioxia dropped 10%.

Treasuries rallied and a gauge of the dollar weakened against all of its Group-of-10 peers. Ten-year yields fell to 4.94% and five-year yields dropped as much as nine basis points to 4.67%, while gold held near $3,940 an ounce after a 1.9% jump the prior session. In crypto, a Bloomberg survey found 71% of respondents expected Bitcoin to finish the year lower under Democratic control.

The AI-specific angle came from the state houses as much as from Capitol Hill. JPMorgan Chase analysts flagged data-center restrictions and higher taxes on corporations and top earners as the clearest consequences of the Democratic wave. Democrats carried governor's races in states already hosting heavy project pipelines: Keisha Lance Bottoms took Georgia and Amy Acton won Ohio, both running on moratoriums for new data-center construction. Acton said she would "take immediate action and support a conditional moratorium on data centers" covering utility costs and union labor.