Asian Markets Decline as Tech Selloff Spreads from Wall Street

This analysis is based on the Wall Street Journal report [1] published on November 6, 2025, which documented the spread of tech sector weakness from U.S. to Asian markets.

The market decline began with U.S. trading on November 6, where the S&P 500 fell approximately 1.0% to close at 6,720.31, while the Nasdaq Composite dropped 1.74% to 23,053.99 [0][3]. This tech-led weakness quickly transmitted to Asian markets during their trading session, with Japan’s Nikkei 225 falling 2.16% and South Korean markets declining 2.1% [2]. The technology sector was the clear underperformer across regions, posting a decline of approximately 1.58% on the day [0].

Individual large-cap technology stocks experienced significant selling pressure. NVIDIA (NVDA) closed at $188.08, down 3.65%, while Tesla (TSLA) declined 3.54% to $445.91 [0]. Trading volume in NVIDIA exceeded average levels at 219.14 million shares compared to the typical 178.9 million, indicating heightened investor activity around these AI-related names [0].

The selloff appears to be primarily driven by valuation concerns and emerging fatigue with AI-related investment narratives [3][4]. Market commentary suggests investors are reassessing the premium valuations assigned to AI and technology leaders after an extended period of outperformance. Additional sentiment pressure came from reports of rising layoff announcements in October, which may have amplified risk aversion [2].

The market dynamics reveal several important cross-domain connections. First, the synchronized decline across U.S. and Asian markets demonstrates the global interconnectedness of technology sector sentiment, particularly around AI-related investments. Second, the concentration of selling in a small group of megacap technology stocks highlights the structural risk of narrow market leadership, where a few names can disproportionately influence broader index performance.

The elevated trading volumes in affected stocks suggest the selloff may involve both institutional de-risking and retail participation, though granular flow data would be needed to confirm the precise drivers [0]. The technology sector’s underperformance relative to other sectors indicates a rotation away from growth stocks, potentially toward more defensive positioning.

Users should be aware that concentrated positioning in AI/technology megacaps and stretched valuations may significantly increase portfolio volatility over the short term [0][3]. This development raises concerns about sentiment-driven de-risking that can spill into other sectors and regional markets; position sizing and liquidity should be reviewed if exposures are large [2][0].

Historical patterns suggest that sharp momentum reversals in narrow leadership groups often precede increased cross-asset volatility and interim drawdowns; prepare for higher intraday volatility and possible temporary liquidity dislocations in the most affected stocks [0]. If the tech weakness combines with weakening macroeconomic data or earnings surprises, it could broaden into more extensive risk-off market movements.

The current market dislocation may present opportunities for monitoring potential entry points in quality technology names at more reasonable valuations, though this requires careful assessment of fundamental strength and earnings trajectories. Additionally, rotation toward value and defensive sectors could benefit certain market segments if the risk-off sentiment persists.

The November 6, 2025 trading session marked a significant tech sector correction that spread globally from Wall Street to Asian markets. Major U.S. indices declined 1-2%, with technology leaders NVIDIA and Tesla falling over 3.5% each [0]. Asian markets followed suit, with Japan’s Nikkei declining 2.16% and South Korean markets dropping 2.1% [2].

The selloff appears driven by valuation reassessment in AI-related stocks, with trading volumes in affected names exceeding average levels [0][3]. The technology sector underperformed by approximately 1.58% on the day, indicating a clear sector-specific rotation [0].

Market participants should monitor ETF flows in technology-concentrated products, options market volatility indicators, and upcoming corporate earnings guidance for signals about the duration and depth of this correction [0]. Cross-asset impacts on currency and bond markets may also provide early indications of whether this remains a sector-specific event or evolves into broader risk-off sentiment [2].