Wall Street sheds $3.2tn as Democratic midterm sweep triggers brutal AI rout

{"text":[[{"start":14.6,"text":"US stocks shed more than $3tn in a day of chaotic trading which saw the tech-heavy Nasdaq 100 plunge 6.4 per cent after Democrats’ sweeping midterm election victory upended Wall Street’s mammoth AI bet."}],[{"start":27.84,"text":"The market value drop on the S&P Composite 1500 index, a broad basket of America’s publicly traded companies, was the biggest since the turn of the millennium, according to FT calculations based on FactSet data."}],[{"start":40.76,"text":"Traders stampeded out of tech shares on fears that Democrats’ stunning victory over Donald Trump’s Republicans in Tuesday’s midterms would cool the AI spending boom that has driven Wall Street to record highs this year."}],[{"start":52.76,"text":"“[Investors] are throwing in the towel and indiscriminately liquidating,” said Adam Crisafulli, president of market research group Vital Knowledge."}],[{"start":61.32,"text":"Selling among chipmakers was brutal, with Nvidia, the company most closely associated with the AI surge, tumbling 9.3 per cent, pushing its market value down more than $400bn. The S&P 500 index of US blue-chip companies lost 4.4 per cent, its worst session since last year’s “liberation day” ructions, in a session marked by wild swings."}],[{"start":83.76,"text":"“With the blue wave, investors fear that peak [AI capital spending] is behind us,” said Charles-Henry Monchau, chief investment officer at Swiss private bank SYZ Group."}],[{"start":94.24,"text":"One hedge fund portfolio manager said the move was driven by quick-moving investors ditching large positions, known as “de-grossing”."}],[{"start":101.36,"text":"“People are starting to get worried now, today the move was so swift,” said another hedge fund executive."}],[{"start":null,"text":"

"}],[{"start":108.24,"text":"Investors fear that newly elected politicians who campaigned against data centres will hit the brakes on AI infrastructure development, eroding Wall Street’s expectations for vast spending on chips, servers and facilities that have driven up earnings expectations and powered stocks to record highs this year."}],[{"start":124.76,"text":"“Guys who would normally be bargain-hunting, excited by these low prices, they’re not jumping in . . . everyone’s hiding out in cash,” said the chief executive of a New York brokerage."}],[{"start":136.2,"text":"Vincent Mortier, the investment chief of Amundi, said the “honeymoon” gains for US stocks on the day after Democrats won control of Congress had been “very shortlived”."}],[{"start":145.8,"text":"He added that the tech repricing was “harsh and quick as the fundamental question marks resurface under the microscope of the new political US picture — data centres backlash, new regulation”."}],[{"start":null,"text":""}],[{"start":157.08,"text":"Abdul El-Sayed, the Democratic senator-elect from Michigan, has said there should be a “full-on pause” in frontier development, arguing that “you’re seeing the pace of technological development outpace the pace of safety”."}],[{"start":169.72,"text":"Incoming South Carolina senator Annie Andrews proposed a two-year ban on new data centre construction to stop communities “getting steamrollered” by “incredibly wealthy, powerful companies”."}],[{"start":180.1,"text":"The Democrats’ win in Congress was “a horrible day for America”, said a US portfolio manager with large positions in tech companies including Anthropic."}],[{"start":189.34,"text":"The results of the midterms would have “massive ramifications” for the price of chips used in AI servers, the initial public offering pipeline and AI data centre companies, the person said."}],[{"start":199.92,"text":"Several Big Tech bosses spent heavily to support the electoral chances of Trump’s Republicans, who have sought to lighten regulation of the AI sector."}],[{"start":208.24,"text":"Semiconductor groups were among Thursday’s biggest declines. Qualcomm dropped 9.5 per cent, Broadcom fell 10 per cent and Micron shed 17 per cent. Memory stocks Sandisk and Western Digital — among the market’s best performers this year — plunged 22 per cent and 17 per cent, respectively."}],[{"start":227.18,"text":"But the selling was not limited to tech stocks. Caterpillar, the world’s biggest heavy machinery maker, slid 6.4 per cent, while retail giant Walmart dropped 1.1 per cent."}],[{"start":238.16,"text":"Elon Musk’s companies, which are both based in Texas where Democrats won the race for governor and their first Senate seat for more than 30 years, had another bad day."}],[{"start":247.28,"text":"Tesla fell 10.8 per cent, adding to a 3.3 per cent drop on Wednesday, while SpaceX was down 9.1 per cent, on top of a 3.8 per cent drop the previous day."}],[{"start":265.04,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793926003_1645.mp3"}