Yesterday’s -6% NDX decline caused by the Dems’ sweep of the House and Senate in the midterms seemed like short-term thinking yesterday and seems even more so today. The decline was based on the thesis that Dems will slow the buildout of AI data centers - a thesis not provable with numbers. Concepts not provable with numbers almost always have short shelf lives and I expect by next week we won’t hear about Dems slowing the data center buildout again.
Meanwhile, S&P 500 2026 earnings remain robust at $369 +33% y/y (with no degradation since Tues night) and implies a 2026 P/E of 19.9x, which translates to a 5.0% earnings yield — above the 4.88% 10-yr treasury yield, which has not happened in months (relationship has been inverted). I expect the equity premium to be restored at its normal 50-100bp premium as the Iran war winds down - which the blue wave from the midterms likely accelerates.
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STI opened about 2.7% lower with DBS and OCBC results to digest is overreaction vs US, after DBS missed forecasts and UOB profit missed, STI -2.7% after STI nearly 10% off peak already priced bank misses, Grab raised outlook shows SG resilience. Democratic sweep turned into AI selloff chip index lost 12% worst since March 2020 and Nasdaq 100 fell 6.4% bearish US tech, after Apple beat but slid on memory costs and Alphabet worst day ever, -12% chip index after chipmakers crashed Friday Intel record drop shows AI bubble finally popping, voters turned on centres is final nail.
☕️ [Task Coins Giveaway] Daily Market Talk — Chip Stocks Crash 12%Chips just had their worst day since 2020. Here's what drove it, how DBS and OCBC results stack up, and what to watch tonight.
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Democratic sweep turned into AI selloff chip index lost 12% worst day since March 2020 confirms bubble pop, after voters turned on AI data centres and chipmakers sank, -12% chip index worst since March 2020 after Alphabet worst day ever and Amazon Intel slid after hours shows AI capex unsustainable after GOOGL cloud doubled FCF negative. Nasdaq 100 fell 6.4% start. STI opened about 2.7% lower with DBS and OCBC results to digest bullish contrarian, after STI sliding again nearly 10% off peak and DBS missed second bank, STI -2.7% open is panic, OCBC results after UOB DBS misses will be relief, MAS hold supports.
☕️ [Task Coins Giveaway] Daily Market Talk — Chip Stocks Crash 12%Chips just had their worst day since 2020. Here's what drove it, how DBS and OCBC results stack up, and what to watch tonight.
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The Democratic Party's comprehensive victory in the US midterm elections triggered a wave of AI sell-offs. The semiconductor index fell 12%, marking its worst single-day performance since March 2020, while the Nasdaq 100 dropped 6.4%.
Investors now view the new Congress and key states as brakes on AI expansion. Texas's newly elected governor called for a pause on new data center construction. S&P 500 -4.36%, Nasdaq -5.52%, Dow Jones -3.44%; VIX panic index surged to 28.
US tech companies remain relatively stable, but stocks in data centers and energy-intensive AI infrastructure sectors plummeted.
Particular attention should be paid to the Wall Street sell-off triggered by the surge in the panic index.
☕️ [Task Coins Giveaway] Daily Market Talk — Chip Stocks Crash 12%Chips just had their worst day since 2020. Here's what drove it, how DBS and OCBC results stack up, and what to watch tonight.
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NDX plunged -6.4% and SPX fell -4.4%, the market’s worst day since April 2025 as investors bailed from technology shares on speculation that congressional Democrats will clamp down on the artificial-intelligence industry.
A rotation away from AI and toward defensive sectors morphed into a broader rout, with the VIX rising the most in two years to 28 from 17. Bitcoin sank -6%. $SOXX, the semiconductor ETF fell -12%. In a rush for safety, treasury bond yields fell -5.5bp to 4.85% despite higher oil prices (brent crude +4%). $NVIDIA(NVDA.US) -9.3% today and is now down -3% YTD. $Tesla(TSLA.US) -11% and $SpaceX(SPCX.US) -9% as odds of a potential TSLA-SPCX merger fell. Fading AI enthusiasm prompted investors to trim bets of a December Fed rate hike to 66% from 82% yesterday. Tomorrow’s Oct jobs report could extend today’s rout if too strong (>130K) or too weak (if negative). WS consensus for Oct non-farm payrolls is +65K new jobs. - S
BREAKING. The Nasdaq 100 $QQQ is down 4.8% and on pace for its worst day since April 2025
The chip index is down 9% after trading down more than 11% this morning$Sandisk(SNDK.US) -15.9%$AMD(AMD.US) -13.7%$Micron Tech(MU.US) -11.8%$Tesla(TSLA.US) -10.0%$NVIDIA(NVDA.US) -6.8%The S&P 500 $SPY is down 3.1%, the Dow is down 2.4% and the $VIX is up 40%This is a full reversal of Wednesday's post-election rally, with traders dumping the AI and data center trade on fears a Democratic Congress slows the buildoutNothing about AI demand changed overnight, the policy risk did. When the most crowded trade in the market gets a new reason to sell, the exit gets very narrow, very fastSource: StockMarket.News
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The midterms-fueled rotation continued (SPX -0.1%, NDX -0.7%), with economically sensitive and consumer names outperforming chipmakers. Brent rose +1.3% to $96/bbl after yesterday’s 8% drop; the 10-year yield eased to 4.87%. The rotation in Asia was even more extreme, with Samsung and SK Hynix falling over 7% on post-Democratic data-center regulation fears. Tech was mixed ($NVIDIA(NVDA.US) flat; $Micron Tech(MU.US), $Marvell Tech(MRVL.US), $Dell Tech(DELL.US) down; $Alphabet - C(GOOG.US), $Meta Platforms(META.US) up) and Musk-led names retreated further ($Tesla(TSLA.US) -1.7%, $SpaceX(SPCX.US) -1.1%) following Dems’ midterm sweep. Robust 2026 S&P EPS estimates (+33% to $369) imply a 20.8x P/E (4.8% yield, just below Treasury yields), with further yield declines expected as the Iran war ends. We remain cautious on $Tesla(TSLA.US) given its 220x 2026 P/E (PEG 5.0x) amid continued commoditization of autonomy and persistent negative revisions.
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Democrats just flipped both the House and the Senate, and stock futures erased a 2.4% overnight drop
Nasdaq 100 futures fell as much as 2.4% and S&P 500 futures as much as 1.4% as results rolled inBy early Wednesday both were up about 1%, with Dow futures up 724 points, or 1.4%Democrats are projected to win at least 250 House seats and at least 54 Senate seats, with Alaska and Mississippi still uncalledElon Musk spent a record of at least $474M on the midterms, $224M of it in Texas, where Democrat James Talarico won the Senate race$SpaceX(SPCX.US) is down 3.8% premarket and $Tesla(TSLA.US) is down 3.5%Gold jumped about 3% back above $4,000 and the 10-year yield slipped to 4.92%Wall Street feared a blue sweep for weeks, then bought it within hours. Gridlock means fewer fiscal surprises and lower yields, which is what futures are pricing. The real pressure point is AI, since voters also rejected data center projects in several towns, so watch $Tesla(TSLA.US), $SpaceX(SPCX.US) and the data center names into the openSource: StockMarket.News
