Ftse 100 hits four-week low as $3trillion US stock market sell-off spreads to UK

The FTSE 100 fell 1.6 per cent on Friday morning, taking the index of leading London-listed companies to its lowest level in four weeks.

Companies with strong links to the US, technology businesses and pharmaceutical firms were among the hardest hit.

The sell-off has wiped roughly $3trillion off the value of major US equities amid fears that Democrat victories in the mid-term elections could slow the AI boom.

Investors are questioning whether the rapid growth that has pushed technology share prices higher can continue under a changing political landscape in Washington.

Concerns about a possible AI “bubble”, where share prices rise beyond what companies’ prospects justify, have added to the selling pressure, analysts said.

The Nasdaq 100, an index dominated by large technology companies, fell 6.4 per cent overnight. Chipmakers and businesses linked to AI suffered particularly steep losses.

Nvidia, whose chips power many AI systems, dropped more than nine per cent.

Elon Musk’s wealth also took a hit as Tesla shares fell roughly 10 per cent and SpaceX declined around nine per cent.

The losses spread beyond technology, with the broader S&P 500 index closing 4.4 per cent lower.

President Donald Trump took to Truth Social to declare that “the stock market suffered one of the worst days in history,” placing the blame squarely on the Democrats for what he described as market chaos.

The damage had already swept through Asia before European markets opened. Japan’s Nikkei plunged approximately 6 per cent, falling below the 60,000 point mark for the first time since May.

Technology heavyweights SoftBank and Kioxia were responsible for much of the decline. South Korea’s Kospi index also suffered sharp losses driven by weakness in the chip sector.

Across the Channel, France’s Cac40 and Germany’s Dax both opened firmly in the red, dropping 1.2 per cent and 1.5 per cent respectively.

Back in London, the more domestically oriented FTSE 250 slipped around 0.8 per cent.

Individual UK-listed technology stocks were not spared either, with Raspberry Pi and IQE among those falling as the session began.

Susannah Streeter, chief investment strategist at Wealth Club, said: “The tech sell-off has intensified, with the pain of the brutal sell-off on Wall Street carried straight through to Asia and knocking sentiment in Europe.”

Ms Streeter added that while the FTSE 100’s relatively low exposure to technology stocks offered some protection, it remained vulnerable because listed multinationals depend on the broader health of the global economy.

Ipek Ozkardeskaya, senior analyst at SwissQuote, pointed to warning signs that had been building for months.

Ms Ozkardeskaya said: “The memory-chip bubble there had already burst around June, with investors heading towards the exit all at the same time, as everyone wondered when the AI frenzy would come to an end.

“It is possible that we have reached boiling point in Nasdaq too, and now value has started evaporating.”