Wall Street Tech Stocks Bounce Back as AI Spending Fears Ease
US technology stocks recovered on Tuesday afternoon after a selloff driven by investor anxiety over spending on artificial intelligence (AI).
Tuesday’s midterm elections did not appear to have a huge impact on Wall Street. Investors are predicting, however, that Democrats will win at least a majority in the House and potentially gain seats in the Senate, which could lead to more regulation of AI.
The S&P 500 closed up 0.37% on Tuesday, while the tech-heavy Nasdaq rose 0.83% for the day. The Dow fell 0.38%, dragged down by a 1.9% drop in Apple’s share price after the company issued a worse-than-expected margin forecast because of the higher cost of memory chips.
Nvidia gained 2.3% after falling over four sessions, while fellow chipmakers Advanced Micro Devices, Broadcom and Micron Technology also jumped on Tuesday.
Tuesday marked the end of a brief selloff of AI and tech stocks that began last week. In October the Nasdaq suffered its largest monthly decline since March 2025, and it had ended Monday in correction territory, down 10% from its record close of 6 October.
Small drops in oil prices, amid potential new negotiations with Iran and Russia, also eased investors. Brent crude, the global benchmark, fell to $103 a barrel on Tuesday, down from $117 a barrel at the end of October.
Many Americans say frustration with the higher cost of living will be a major factor in their vote on Tuesday. Even so, Wall Street has continued to soar on investments in AI, particularly the chips and infrastructure used to power the technology. The S&P 500 is up 10% so far this year, while the Nasdaq and the Dow are up 9% and 7% respectively.
CNBC analysis of post-midterm market performance from 1980 to 2024 showed that markets tend to pick up after an election. Wall Street is often jittery before an election, when results are uncertain, but recovers once the results are settled.
