Symbolic imageAI stocks slide, then broader markets rally after Democratic midterm sweep
Tech and AI shares fell in Asia on Wednesday as investors feared tighter AI regulation after the Democratic midterm wins. Broader indices then recovered.
After Tuesday's midterms, Asian tech shares fell 3 to 4% on Wednesday, 4 November, on fears of stricter AI regulation. The Financial Times reported that traders bet Democrats could slow the infrastructure build-out central to economic growth. The Wall Street Journal described an Asian selloff that gave way to a relief rally, while Handelsblatt wrote that only AI stocks kept falling. The FT also reported that the midterms have already cost Elon Musk more than $60bn.
Dollar slips, gold and bonds gain
Bloomberg named the Swiss franc and the yen as the currency winners as the dollar weakened. The Wall Street Journal reported that gold climbed on the softer dollar and that the two-year Treasury yield fell to a two-month low.
Europe diverges from AI worries
Bloomberg reported that European stocks were set to dip on AI concerns. Handelsblatt wrote that the Dax later rose to a two-month high after the midterms.
The vote behind the moves
Democrats won the Senate and the House in the midterms, the result that triggered the market reaction.