US tech stocks rebounded on Tuesday following a brief selloff that had rattled investors concerned about artificial intelligence (AI) spending. The recovery came amid midterm election results that, while not significantly impacting Wall Street, hinted at potential regulatory changes as Democrats are expected to maintain a majority in the House and possibly gain seats in the Senate.
The S&P 500 rose by 0.37% at market close, while the Nasdaq, known for its tech-heavy composition, increased by 0.83%. In contrast, the Dow Jones Industrial Average fell by 0.38%, largely due to a 1.9% drop in Apple’s share price, which was affected by a disappointing margin forecast attributed to rising memory chip costs.
Chipmakers saw a positive turn, with Nvidia gaining 2.3% after a four-session decline. Other semiconductor companies, including Advanced Micro Devices, Broadcom, and Micron Technology, also experienced gains on Tuesday. This uptick marks the end of a selloff that began last week, during which the Nasdaq recorded its largest monthly decline since March 2025, falling 10% from its record close on October 6.
Additionally, a slight decrease in oil prices contributed to easing investor concerns. Brent crude, the global oil benchmark, fell to $103 a barrel, down from $117 at the end of October, amid potential new negotiations involving Iran and Russia.
Despite ongoing frustrations among Americans regarding the rising cost of living, which many cited as a significant factor in their voting decisions, Wall Street has remained buoyant, particularly due to investments in AI technologies and the infrastructure supporting them. Year-to-date, the S&P 500 has risen by 10%, with the Nasdaq and Dow up by 9% and 7%, respectively.
Historical analysis indicates that markets typically recover after midterm elections. According to CNBC, from 1980 to 2024, post-election performance has shown a tendency for stocks to rise once election results are confirmed, alleviating pre-election uncertainties.
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For further details on the implications of AI spending and market dynamics, refer to the original article from The Guardian.
