Global markets slid on Tuesday, November 3, 2026, as Americans voted in the midterm elections, technology shares extended a sharp retreat and Australia delivered its fifth interest-rate rise of the year. The Nasdaq 100 entered technical correction territory, down 10 per cent from its record highs, while the Philadelphia Semiconductor Index fell for a third straight session.

Key Points

• The Nasdaq 100 entered a technical correction, falling 10 per cent from its record highs as doubts grew about how quickly heavy artificial intelligence spending will pay off.
• South Korea's Kospi fell nearly 4 per cent, with Samsung down about 4 per cent and SK Hynix down 5.7 per cent, while Taiwan's Taiex dropped about 3.6 to 3.8 per cent.
• Europe's STOXX 600 was down 0.4 per cent at 647.13 by 0955 GMT, with technology down 1.6 per cent, ASML down 3.4 per cent and STMicroelectronics down 3.9 per cent.
• Australia's Reserve Bank raised its cash rate by 25 basis points to 4.85 per cent, an 18-year high, in a split 6-3 vote — its fifth rise this year.
• Oil rebounded after the reported United States strikes on Iran's Qeshm Island, with Brent reaching about $106.57, up 1.7 per cent, even as equities fell.

What Happened

The sell-off was broad, but technology led it. Investors who had driven chipmakers and other artificial intelligence beneficiaries to record valuations stepped back as questions mounted over returns on enormous capital spending. The Philadelphia Semiconductor Index fell for a third consecutive session, taking its three-session loss to 12 per cent. With the Nasdaq 100 down 10 per cent from its peak, one of the market's defining trades of recent years is now firmly in correction territory.

Asia felt the pressure first. South Korea's Kospi fell nearly 4 per cent, dragged lower by Samsung, down about 4 per cent, and SK Hynix, down 5.7 per cent. Taiwan's Taiex dropped about 3.6 to 3.8 per cent. The declines mattered beyond local markets because both economies are central to the global semiconductor supply chain: Samsung and SK Hynix make memory chips used worldwide, while Taiwan's manufacturers produce many advanced processors used by artificial intelligence systems.

Europe followed the same pattern. By 0955 GMT, the STOXX 600 was down 0.4 per cent at 647.13, with technology again the weakest sector, down 1.6 per cent. ASML, the Dutch firm whose lithography machines are essential to making advanced chips, fell 3.4 per cent, while STMicroelectronics dropped 3.9 per cent.

Background: Why AI Spending Is Under Scrutiny

For much of 2026, the largest technology companies have announced ever-larger spending plans for data centres, chips and power, arguing that artificial intelligence will transform productivity. Investors largely accepted that argument while earnings kept rising. The mood has shifted as the scale of spending has become clearer and the timetable for returns less certain. Chipmakers are at the centre of that debate: demand has been extraordinary, but valuations now assume years of rapid growth, so any sign of softer demand hits shares hard.

Recent United States trading had already shown that fragility. Wall Street closed mixed on Monday, with the Dow rising while the Nasdaq fell on a technology sell-off, and United States stock futures slipped on Election Day as Apple's outlook weighed on sentiment. Tuesday's global declines extended that pattern, suggesting investors were reducing risk in stages rather than reacting to a single headline.

Global Markets Slide: Asia and Europe Lead the Retreat

South Korea's nearly 4 per cent fall was the steepest among major Asian markets on Tuesday. Samsung's roughly 4 per cent decline and SK Hynix's 5.7 per cent drop carried particular weight because both are bellwethers for memory demand, a sensitive indicator of conditions in smartphones, computers and data centres. When memory makers fall sharply together, traders often read it as a sign that customers are ordering more cautiously.

Taiwan's Taiex, down about 3.6 to 3.8 per cent, told a similar story from a different part of the supply chain. Its chip industry is concentrated in advanced manufacturing, so its shares are sensitive to any reassessment of artificial intelligence demand. Europe's response was orderly by comparison, but still negative: the STOXX 600's 0.4 per cent decline masked a sharper split beneath the surface, with technology down 1.6 per cent while more defensive sectors held up better.

Reactions: A Cautious Market, Not a Panic

The tone on Tuesday was cautious rather than panicked. Falls in Asia were large, but European declines were contained, and oil's rebound showed that not every asset was moving in the same direction. That pattern fits a market trimming exposure to its most crowded trade — technology and artificial intelligence — rather than selling everything at once. Australia's decision added a different caution: by raising rates to an 18-year high, the Reserve Bank signalled that inflation pressures remain live, and its split 6-3 vote showed the decision was contested inside the bank.

Why It Matters

A Nasdaq correction matters because the index has become a proxy for the broader American growth story. Pension funds, index trackers and retail investors hold large exposures to its constituents, so a 10 per cent fall from record highs reaches far beyond trading desks. It also matters for companies: when valuations fall, raising capital gets harder, and boards may scrutinise artificial intelligence budgets more closely. Australia's rate rise, meanwhile, will feed directly into mortgage costs for Australian households.

What Happens Next

The next tests will come quickly. United States trading will show whether the Nasdaq's correction deepens or stabilises, and whether buyers return to chip stocks after three sessions of falls. Earnings and guidance from major technology companies will be scrutinised for any sign that artificial intelligence spending is slowing. In Asia, the next sessions in Seoul and Taipei will indicate whether Tuesday's falls were a one-day reset or a longer adjustment, while markets will watch for any Reserve Bank statement clarifying whether the split vote points to further tightening.

Frequently Asked Questions

What does it mean that the Nasdaq 100 entered a correction?
A technical correction is a fall of at least 10 per cent from a recent peak. The Nasdaq 100 met that definition on Tuesday, November 3, 2026, after falling 10 per cent from its record highs.

Why did Asian technology shares fall so sharply?
South Korea's Kospi fell nearly 4 per cent and Taiwan's Taiex dropped about 3.6 to 3.8 per cent as investors questioned how quickly heavy artificial intelligence spending will generate returns.

Why did Australia raise interest rates to 4.85 per cent?
The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.85 per cent, an 18-year high and its fifth rise this year, in a split 6-3 vote, reflecting continued inflation concerns.

Why did oil rise while shares fell?
Brent rose about 1.7 per cent to about $106.57 after the reported United States strikes on Iran's Qeshm Island, as geopolitical and supply risks lifted prices even as equities retreated.

Does the midterm election affect the markets?
Election outcomes shape tax, spending and regulatory policy, so traders watch results closely, but Tuesday's falls were driven mainly by technology valuations, Australia's rate decision and oil.