It took around 24 hours for Wall Street’s response to the US midterm elections to turn negative. Once it did, it set in motion a chain reaction of selling that moved considerably faster.
The blue wave that swept Congress was initially met with a solid gain in American stocks, with the event risk tied to the vote out of the way and oil prices in retreat, and on expectations the Trump administration would now be reined in.
But by Thursday morning, investors were reassessing the wider implications, and the Democrats’ deep skepticism of the data-center expansion on which the artificial intelligence revolution depends.
What began with selling by retail investors was accelerated by hedge funds and long-only managers, before quantitative firms that ride market volatility compounded the losses. The final result was the tech-heavy Nasdaq 100 Index’s worst drop since March 2020 — and $3.7 trillion of US market value wiped out in a day.
As the market looks set to end the week in more stable fashion with the Nasdaq 100 regaining some of the ground it lost, this is how the initial selloff unfolded.