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After the Democratic Party gained control of both chambers of Congress, the NASDAQ 100 index rose by 1.14%, but there was a divergence in performance among large AI stocks and technology stocks.
Bitcoin rebounded above $80,000, while NVIDIA, Tesla, Intel, and Meta fell.
Trump's media stocks tumbled by more than 14%, continuing the bearish trend that had been established in the weeks before the election.
On Wednesday, following the Democratic Party's sweeping victory in the U.S. midterms, tech stocks showed a mixed performance. On one hand, investors weighed the prospects of stricter regulations on artificial intelligence, while on the other hand, they also considered the possibility that a divided government could limit major policy changes.
The Nasdaq 100 index rose by 1.14% to 28,500 points, regaining ground lost during the overnight selling pressure; previously, futures prices had fallen by more than 2% before the market opened.
However, amidst the overall market rebound, the trends of individual stocks are quite different.
According to the in-market charts reviewed on Wednesday, Microsoft rose by 6.01% to $552.32; Google's parent company Alphabet rose by 4.63% to $292.99.
While software stocks were rising, hardware stocks saw a pullback and declined. AI Chip manufacturing giant NVIDIA fell 2.19% to $202.17; Tesla fell 3.61% to $384.10; Intel fell 5.80% to $57.04.
However, there is currently no obvious strong bearish trend in these stocks. Even for NVIDIA, which has seen the most significant pullbacks, the longer-term trend remains bullish; it's just that the stock price is testing a weaker support level around $200.
These contradictory trends reflect the uncertainty of the impact that tech companies will face after the Democratic Party takes control of Congress. In the past, these companies benefited from the Trump administration's more relaxed regulatory stance.
According to Reuters, investors are particularly concerned that as the Democratic Party wins in states such as Texas and Georgia, AI data centers – the hardware infrastructure of the AI industry – may face stricter scrutiny; these large-scale infrastructure projects have become focal points of political controversy locally.
The AI industry has also been facing substantial infrastructure expenditures in the past, as well as the question of whether these investments will generate sufficient returns.
The plummet of Trump-related media outlets began long before election night.
Before the voting on Tuesday, this stock had already fallen by about 55% for the year.
Technical indicators show that traders have been bearish on this stock for months. Since March 2025, Trump-related media has been in what traders refer to as a "death cross" technical pattern; since its listing in 2024, its market value has shrunk by nearly 90%. A so-called death cross occurs when the 200-day moving average is higher than the 50-day moving average, which usually indicates that the asset is depreciating too quickly.
The rebound of the Nasdaq 100 index is a positive sign for tech bulls, but the index is still far below its October high, which was above 31,000 points. The 28,000 point area serves as the current direct support level, and if it can once again exceed 29,000 points, it will help to strengthen the short-term rebound.
Bitcoin has once again reached $80,000, which also indicates that the preference for risk has not completely disappeared.
However, the divergence between winners and losers in tech stocks on Wednesday indicates that investors are becoming more cautious in determining their exposure to the AI craze, as well as the political risks surrounding this craze.
Disclaimer
The views and opinions expressed by the author are for reference only and do not constitute financial, investment, or other advice.
