US Mid Term Market Review

Wall Street did its own thing after the US midterms, and the result was far more interesting than the political headlines suggested. The Dow surged roughly 3%, but beneath the rising indices, a cluster of companies supplying the AI boom took a hammering.

A quick recap of the overnight action shows the following –

Interestingly, the lift in US markets was not uniform, with the DJI leading the way and the NDX lagging. As always, looking simply at the index doesn’t tell the entire story.

If we dig a little bit deeper into what happened with the NDX, we see the following fallout –

There were some fairly substantial markdowns last night. Chip designers, storage manufacturers, cloud operators and electricity generators appeared together on the losers list. Different businesses, but with a shared dependence on the enormous sums being committed to AI infrastructure.

It’s hard to tell whether this continues the “The Emperor has no clothes” theme dogging AI, or Wall St’s realisation that the tech-bro era of brown-nosing an administration is over.