AI summary
Summary of article:
The optimism brought by the US midterm elections lasted only for a day. After the market re-evaluated the Democratic Party’s concerns about AI and data center supervision, retail investors and institutions began selling one after another, and technology stocks and AI concept stocks were hit hard.
After the results of the US midterm elections were declared,wall Street At first, there was a sharp increase in reaction, but after 24 hours, the market environment deteriorated, and sell orders increased on Thursday (5th), triggering a series of selling pressure one after another.US stocks Rivers of blood suddenly flowed out, and the front line merchants watched in horror.
The Democratic Party won a landslide victory in the March 3 elections, winning both houses of Congress. It also ran a “blue” campaign in state and local elections across the United States.tsunami “. The three major US stock indexes rose together on the 4th, reflecting the elimination of election uncertainty, the decline in oil prices, and the expectation that the Trump 2.0 government will show some restraint after the election, which made investors feel relieved.
Unexpectedly, a day later, the market changed. Traders said investors reassessed the potential impact of a “blue tsunami” the following day. The Democratic Party’s tendency to tightly regulate artificial intelligence (AI) and its skeptical attitude toward data center expansion have particularly strengthened investors’ determination to take advantage.
Retail investors started exiting their holdings, triggering a chain reaction
Bloomberg News reported that the selling pressure began as retail investors sold their stakes, followed by hedge funds and long-stock fund managers, and then quantitative firms took advantage of the increased volatility in the market, fueling the decline. The result is this: The Nasdaq 100 index, which is home to technology stocks, fell 5.5% on the 5th, setting a record for its deepest one-day decline since March 2020. The US stock market lost $3.7 trillion in value in one day.
Kumar, a strategist at Jefferies in London, said that after the sharp rise in US stocks on the 4th, investors were gradually thinking about policy changes that may cause a “blue tsunami”. In particular, the Democratic Party can use the new public opinion to strictly control the new AI data center investment plan. They are worried that this may slow down the growth of AI, so they decided to trade and take profits on AI stocks.
Kumar pointed out that this wave of retail sales is the most spectacular wave since the collapse of US stocks due to the new crown epidemic.
Mongas, a member of the Columbia Options and Futures Trading Club and a graduate student in the Department of Electrical Engineering at Columbia University, said: “I started work at 7 o’clock and watched the Nasdaq fall rapidly after the opening. The S&P 500 index also followed suit, but the Nasdaq was the craziest and was pulled down due to the fall of AI stocks. My cell phone started ringing continuously. Everyone was checking stock prices, and they were all falling. Were.”
The intensity of killing is unprecedented since the COVID-19 pandemic.
According to data from analysis company Wanda Research, on Thursday, a day of decline in technology stocks, the net selling volume of individual stocks by retail investors was the third largest in history, second only to the two trading days in March 2020, when the new crown epidemic hit the United States and generated panic selling pressure.
Once there is selling pressure on Wall Street, its size begins to increase. When retail investors started selling stocks wildly, hedge funds also joined in and the selling pressure intensified, forcing long-time sole fund managers to do the same. The unusually large amount of selling by this group of professional investors shows that they have started turning profits and have attempted to maintain very strong operating performance so far in 2026.
The problem is that while selling pressure is increasing, there are no big buyers on the other side.
“While retail investors and programs are selling, institutional investors are staying on the sidelines,” said Patel, global macro strategist at Wanda.
Adler, head of equity trading at JPMorgan Chase, said trading volume increased 50% that day. According to his observation, investors are “selling stocks indiscriminately” and “the direction of capital flows seems logical, but the scale is surprising.”
As major US stock indexes fell below key support levels one by one, systemic selling intensified.
