Key insights
- Nvidia and Qualcomm each dropped over 9% following a Democratic midterm sweep, which altered expectations for AI spending. The Nasdaq entered correction territory, down 9.55% for the week. Stocks reliant on aggressive data center and chip growth forecasts experienced significant pullbacks as the market adjusted to the new political landscape. The market is testing whether this is a sector reset or a temporary correction.
A Democratic midterm sweep hit AI-linked stocks hard. Nvidia and Qualcomm each fell more than 9% in a single session, the QQQ dropped 6.49% on the day and sits down 9.55% on the week, and the Nasdaq crossed into correction territory. Taiwan had to step in after its benchmark posted its worst week in 25 years. Wall Street had spent months pricing in a political environment that would keep AI spending wide open. When that changed overnight, every stock built on aggressive data center and chip growth forecasts had to absorb the gap between those forecasts and the new reality. The names that ran the hardest on expansion stories gave back the most. Futures bounced the next session, which is a real test of whether buyers have conviction or are just testing the floor. Are you treating this as a full sector reset that runs further, or a one-week flush that opens a better entry into Nvidia and similar names?