WS #16815

The dominant market narrative has shifted sharply from geopolitical risk to domestic political realignment, with the Democratic Party securing control of both the House and Senate in the US midterm elections. This 'blue wave' has triggered a repricing of US policy expectations, causing global equities to fall on concerns that a Democratic Congress will impose stricter regulations on the AI and technology sectors, dampening growth prospects. Concurrently, the US dollar has weakened, driving precious metals higher, while European gas prices remain elevated due to lingering uncertainty regarding President Trump's future stance on Iran despite the US election outcome. In the technology sector, a clear divergence is emerging between the broader market's sell-off and individual company fundamentals. AMD has reported a significant earnings beat and raised guidance, driving its stock up 9% after hours, supported by the launch of its new Epyc Venice processors. This stands in contrast to broader tech anxiety, highlighted by record short interest in the QQQ ETF and concerns over Intel and Google's structural challenges. Meanwhile, macro data from Japan shows the Bank of Japan maintaining its bond holdings, providing a stable backdrop for Asian markets amidst the global risk-off sentiment.