AI-Led Tech Selloff Rattles Global Markets as Chip Stocks Rebound; BoE Raises Rates to 4%

US tech shares sold off sharply after the midterm elections, with the S&P 500 down 4.36% on Nov. 5 and global markets following, before AI stocks rebounded Friday. The Bank of England raised Bank Rate to 4% while the ECB held rates.

Maz Vantage · 7 Nov 2026

Wall Street's AI-led selloff and partial rebound

US technology shares were at the centre of global markets this week. The S&P 500 lost 4.36% on Nov. 5, a session that began less than 2% below its Oct. 6 record close (Nasdaq). The Guardian reported that the Democrats' decisive midterm victory triggered a rout in US tech stocks on Thursday, followed by sharp falls in Asian and European markets on Friday, and that many analysts expect further waves of selling (The Guardian).

The BBC said fears of more AI regulation appear to have unsettled investors, though concerns about the industry had been building for some time (BBC). By late Friday, AI-related stocks had climbed after trillions of dollars had been wiped from market values (BBC). MarketWatch noted that Nvidia, AMD and other chip stocks rebounded, while analysts warned that more volatility could follow even though some factors favour the AI trade (MarketWatch).

Debt funding and valuation debates

MarketWatch argued that heavy debt issuance to fund AI data centres weighed on bond performance this year, and that the funding need is unlikely to ease with Democrats controlling Congress (MarketWatch). A separate MarketWatch piece described a sharp online debate over Micron's valuation, with some investors seeing the shares as very cheap and others doubting that its earnings power will last (MarketWatch). The Guardian's explainer asked whether the volatility could mark the start of a wider meltdown, noting that markets have wobbled on tech-bubble concerns in recent months (The Guardian).

Corporate news: Tesla

Tesla chief executive Elon Musk announced that the Cybertruck factory in Texas will shift production to the Cybercab, the company's self-driving taxi, signalling the end of the Cybertruck's run (MarketWatch; The Guardian).

Central banks and energy

The Bank of England raised Bank Rate by 0.25 percentage points to 4% on Nov. 5, by an 8-1 vote, with one member preferring a 0.5-point rise. It cited a Middle East conflict now in its ninth month and rising global energy prices, and said UK CPI inflation reached 3.5% in September and is expected to rise to around 5% by the middle of next year (Bank of England).

The European Central Bank kept its three key interest rates unchanged on Oct. 29, saying continued energy price increases pose upside risks to inflation and downside risks to growth, and that financing conditions have tightened (ECB). The ECB also announced that President Christine Lagarde will step down on Feb. 7, 2027 (ECB).

Wall Street's AI-led selloff and partial rebound

Debt funding and valuation debates

Corporate news: Tesla

Central banks and energy

Sources