Stock Market Chaos Following US Midterms
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Record Losses in S&P
US stocks are stabilising today following a sharp lunge lower yesterday. The S&P sank more than 4%, it’s largest single day loss since April 2025. The move was driven by heavy losses in AI stocks as traders digested the ‘Blue Tsunami’ outcome in the US midterms and judged its implications for the AI outlook. The moves were widespread and brutal with the so-called ‘Magnificent 7’ seen losing over $1 trillion combined yesterday. AI stocks have been on the ropes for the last month, first rocked by fears over funding levels, some earnings misses in big names for Q3 then amplified these losses while this week’s Democratic sweep looks to have sealed the deal, raising fears over the prospect of heavier restrictions on data-centre building and a slowing of AI advancement consequently.
US Jobs Data Next
The rebound in the US Dollar has also weighed on stock prices as traders now look ahead to today’s US NFP release. Market pricing for a December Fed hike remains around the 70%, having fallen back from highs of around 9% a few weeks ago. As such, today’s US jobs data could revive traders’ hawkish Fed expectations if we see any upside surprise. In this scenario, stocks look vulnerable to a fresh push lower if the USD rally receives fresh upside impetus.
Technical Views
S&P 500
Yesterday’s collapse saw price breaking down through the 7,616.17 level. The market is now testing a key support area formed by the long-term bull trend line from 2025 lows and the 7,319.09 structural zone. Bulls need to hold this area to prevent a deeper drop down towards the 7,019.56.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.