Live: European stocks plunge after US midterm election results shock markets

European shares tumbled on Friday as global investors grappled with uncertainty over AI stocks, following the Democrats’ sweeping victory in the US midterm elections. The drop is partly due to fears that Democrats could curb the development of AI data centres, which are widely unpopular among US voters. Follow our liveblog for all the latest updates. 

European shares fell on Friday, with losses across the board as a global market rout gathered steam, capping a painful week as investors grappled with uncertainty over AI stocks after ​Democrats took ‌control of the US Congress.

The pan-European STOXX 600 index dropped 1 percent to 648.83 points ⁠by 09:19 GMT, with benchmarks in most major regional markets trading lower. Friday's losses wiped out STOXX's gains for the week, and it was down about 0.3 percent.

Fears ‌that a Democrat-led Congress could seek curbs on AI data-centre spending added to concerns over ⁠weak returns, lofty valuations and debt-fueled investment.

"The AI build out is responsible for quite a chunk of US growth, not just in terms of the construction, the manufacturing, the components needed, but also the ​fact that valuations have shot so high that it's actually added to wealth perceptions of ‌Americans," said Susannah Streeter, chief investment strategist at Wealth Club.

"If you start to see stock portfolios hit, that is going to act as a real drag on consumer sentiment," Streeter said, adding that she expects market volatility to persist till at ‌least January when there could be more clarity on the Democrats' approach to AI policy.

Tech stocks struggled to make a comeback after dropping earlier on Friday.