Taiwan's stock market is getting hit hard as fears about an AI bubble combine with uncertainty over next week's US midterm elections.

• Bloomberg analysts say if Democrats win control of Congress, they could push for stricter oversight of AI and data centers, which would hurt chip stocks — TSMC, Foxconn, Quanta, and Delta Electronics are named as most exposed, along with Samsung, SK Hynix, and Advantest in Korea and Japan.
• If Republicans hold Congress instead, that's seen as good news for tech supply chains in Taiwan, Korea, Japan, and the US, since it avoids a policy shake-up.
• A split government would land somewhere in between, and historically US stocks have risen in the 12 months after midterms no matter which party wins.
• Beyond the election, Intel's ugly earnings report — its worst single-day stock drop since 1974 — dragged down Nasdaq and spooked investors worldwide, reviving comparisons to the 2000 dot-com crash.
• Taiwan's main index plunged over 1,150 points in a single day, breaking below a key technical support level, with Delta Electronics stock roughly cut in half from its May peak.

Some analysts argue the sell-off is driven by foreign investors repositioning and margin-call selling rather than any real deterioration in chip industry fundamentals, suggesting a short-term rebound is possible. One investor notably bought more TSMC shares during the dip, calling it a buying opportunity.

Outlook: Markets will stay volatile heading into and after the November 4 US midterm results, with chip stocks especially sensitive to any sign of AI spending pullback or regulatory shift.