US stocks and Nikkei fall on Democratic election gains

US stocks and Asian markets fell sharply Wednesday as investors reacted to the Democrats' unexpectedly strong performance in the US midterm elections, fueling fears of slower AI development. The Nikkei dropped up to 4.5 percent, while US futures also declined. The Democrats are projected to regain a majority in the House of Representatives, with a Senate majority also seen as likely. In Japan, the Nikkei fell 4.5 percent and Korea's Kospi dropped 3.2 percent, with the selloff driven by losses in semiconductor and AI stocks. A Japanese holiday on Tuesday amplified the Nikkei's decline, as markets caught up with Monday's losses. Tokyo initially opened slightly higher on strong AMD earnings but reversed sharply amid renewed concerns about AI investment prospects under Democratic leadership.