Technology news and discussion on TalkFuse.
‘The blood is in the streets’: Nasdaq plunges as US midterms rattle SpaceX and Nvidia
US markets fell sharply after midterm election results gave Democrats control of both chambers of Congress, creating a check on President Trump and raising concerns among investors about AI and data centre investment. The Nasdaq dropped more than 5 per cent, as traders moved out of technology shares amid fears of political pressure on the sector.
Nvidia and Broadcom fell 8 and 9 per cent respectively, while Tesla and SpaceX each lost 10 per cent. The Dow Jones declined 2.4 per cent and the S&P 500 fell 3.5 per cent; in London, the FTSE 100 slipped 0.4 per cent, with Polar Capital and Computacenter down 7 per cent. Elon Musk spent about $474m during the midterm cycle, making him the largest single-cycle political donor in modern US history, according to the article.
In short
- Nasdaq fell more than 5 per cent after the US midterms.
- AI and data centre concerns weighed on technology shares.
- Tesla and SpaceX each dropped 10 per cent.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
A sharp sell-off can be defended as a rational response to greater uncertainty: divided government may bring investigations, tougher oversight or policy changes affecting technology, AI and data-centre investment. Investors who had priced in continued growth could reasonably reduce exposure when the political outlook shifts, particularly for companies whose valuations depend on ambitious future spending.
The case against
The market reaction may be an overreaction to political uncertainty rather than evidence that the companies’ prospects have materially changed. A Congress controlled by the opposition can constrain the president, but it does not by itself determine corporate earnings or end AI and data-centre investment; investors could therefore see the falls as short-term volatility that overlooks businesses’ underlying demand and capacity to adapt.
Explained simply
The US midterms are elections held halfway through a president’s four-year term. Voters choose members of Congress, which has two chambers: the House of Representatives and the Senate. Congress makes federal laws and can limit a president’s plans, so control of both chambers by the opposing party can affect what policies are likely to pass.
Investors are watching how political changes could affect technology companies and spending on artificial intelligence and data centres, which house the computers that power digital services. Nvidia and Broadcom make chips used in computing, while Elon Musk leads companies including Tesla and SpaceX. Musk’s large political donations have also drawn attention to the links between business leaders and US politics.
AI Americas Business Elections Markets Politics Space Technology World