The Democrats secured majorities in both chambers in the U.S. midterm elections. AI and semiconductor-related stocks saw notable declines in the market, focusing attention on the operation of Congress and policy developments ahead.
The Democrats recaptured majorities in both chambers in the U.S. midterm elections. This established a new Congress, and the Democrats are prepared to closely monitor the administration and surrounding developments by exercising investigative powers and other means. This is viewed as a market risk factor and is expected to affect the performance of related stocks.
Views remain widespread that uncertainty over U.S. politics will persist in the market, with selling particularly observed in artificial intelligence (AI) and semiconductor-related stocks. The prospect of policy changes and tighter regulation is increasing investor caution, and volatility could rise depending on developments.
The impact of the U.S. political situation may not be limited to a short-term reaction, and market sentiment could shift again as the start of the new Congress's activities approaches at the beginning of the year. Investors will need to monitor AI and semiconductor-related stocks from both policy and corporate earnings perspectives.