David McNamara: Markets wobble following the US midterms

Predictions a blue wave will fundamentally change the prospects for the US economy are probably overblown

Given the lofty valuations of AI-driven stocks, a price correction was a distinct possibility in recent months. Indeed, the tech-heavy Nasdaq essentially hit a peak in May of this year, and has treaded water since then.

The US midterms have precipitated a sharp correction in US equity markets, driven by fears of a policy lurch towards increased regulation of AI and related infrastructure. 

Most notably, several state-level ballot measures and candidates seeking to curtail data centre construction were successful. This has triggered a re-assessment of the AI trade, with firms most exposed to the build-out seeing the sharpest hit to valuations.