US technology stocks staged a recovery on Tuesday afternoon, November 3, bringing an end to a brief selloff that had unnerved investors regarding the extensive spending on artificial intelligence (AI).
The Nasdaq, which had experienced its largest monthly decline since March 2025 in October and entered correction territory on Monday by dropping 10% from its October 6 record close, saw a reversal of fortunes. Leading the rebound, Nvidia picked up a 2.3% gain after four consecutive sessions of declines. Other prominent chipmakers, including Advanced Micro Devices, Broadcom, and Micron Technology, also recorded jumps on Tuesday.
Despite Tuesday's midterm elections, Wall Street appeared largely unaffected by the political event. However, investors are anticipating that Democrats will secure at least a majority in the House and potentially gain seats in the Senate, a scenario that could pave the way for increased AI regulation.
Adding to the positive sentiment, a small dip in oil prices helped ease investors. Brent crude, the global oil benchmark, fell to $103 a barrel on Tuesday, down from $117 a barrel at the close of October. This decline occurred amid prospects of new negotiations involving Iran and Russia.
While many Americans cited frustration with the rising cost of living as a significant factor in their midterm votes, Wall Street has continued to see substantial gains from investments in AI, particularly in the chips and infrastructure essential for powering the technology. Year-to-date figures show the S&P 500 up 10%, while the Nasdaq and the Dow have risen by 9% and 7%, respectively.
Historical analysis from CNBC, examining post-midterm market performance between 1980 and 2024, indicates a tendency for markets to strengthen after an election. Wall Street often exhibits nervousness ahead of elections due to uncertain outcomes but typically recovers once the results are finalized.
