Japan's Nikkei falls into a bear market and Korea's Kospi halts on an 8% plunge as the AI rout hits Asia

Asian stocks took the next hit from the artificial intelligence selloff on Friday. Japan's Nikkei 225 fell more than 6% and entered a bear market, and South Korea's Kospi dropped more than 8%, below the 5,000 mark, according to CNBC's live coverage. The WSJ headlined the Nikkei's drop at 5.9%, so the exact close will differ from these early-session figures.

What moved

CNBC reported the Nikkei more than 20% below its June peak, the usual bear-market line. Our own chart agrees: the index traded around 56,780 on Friday, about 21.5% under its June 25 high. Its previous close was 61,077.9. Chip names led: Advantest fell 12%, SoftBank Group 11%, Kioxia 11% and Tokyo Electron nearly 9%.

In Seoul the Kospi's circuit breaker suspended trading for 20 minutes, and the small-cap Kosdaq lost more than 7%. Investing.com and Yahoo Finance also reported the halt. We covered the index's earlier slide in October; it was at 5,668 then, and Friday's plunge is on top of that.

The trigger is on Wall Street

On Thursday the Nasdaq Composite fell 5.5% into correction territory, the S&P 500 lost 4.4% and the Dow fell more than 1,800 points, all their worst days since April 2025, per CNBC citing FactSet. CNBC tied the selling to worries that Democratic wins in the House, Senate and key governorships could slow data center construction. Nvidia dropped 9%; Micron and AMD fell 17% each. Our market close story has the full tally.

Asia matters here because Japan and Korea host much of the AI hardware chain: chip equipment, memory and the investors who own them. When US chip stocks fall 9% to 17% in a day, those names open lower the next morning.

What to watch next

• US futures: at about 8:30 PM ET, S&P 500 futures were down 0.6%, Nasdaq-100 futures 0.8% and Dow futures 291 points, per CNBC. That is a smaller move than the Asian indexes.
• Payrolls, Friday morning: the Dow Jones consensus is 59,000 October jobs, up from 29,000 in September, with unemployment steady at 4.2%. CNBC says the market prices about a 70% chance of a quarter-point Fed hike at its next meeting, so a strong number matters.

Not everyone is selling. G Squared Private Wealth CIO Victoria Greene told CNBC the pullback is "a good discount" and that the AI trade "is not dead." That is one strategist's view, not ours.

Sources: CNBC; WSJ; Investing.com; Bloomberg; Yahoo Finance; FactSet via CNBC. Figures are early Friday Asia-session levels and can change. This is market information, not investment advice.