Nov 6 (Reuters) – Wall Street recovered some ground on Friday, a day after fears about tighter US regulation of AI wiped trillions of dollars off world stock markets and triggered a dash for government bonds.
The Nasdaq was up 1.5% on Friday, clawing back some of its 5.5% Thursday tumble, its biggest drop since the tariff-triggered “Liberation Day” rout in 2025.
Here’s what some market participants are saying:
MARK DOWDING, CIO FIXED INCOME, RBC BLUEBAY:
“Obviously the Democrat win puts a handbrake on the AI build-out and this may detract a bit from growth but the reality was that the AI part of the economy had been overheating, and so this may not actually be a bad thing. In this respect, markets had been straining under a deluge of debt and equity issuance and if this moderates, then it may suggest a somewhat more favourable outlook for AI related credit.”
GUY MILLER, CHIEF MARKET STRATEGIST, ZURICH INSURANCE GROUP:
“While it may have a bit further to run, as levered positions are unwound, I suspect the sell-off is overdone. Tech has been weakening for some time, despite still remarkable earnings being posted, suggesting that there is not a lot of euphoria on the part of investors.”
“Certain parts of the technology sector are now very cheap and continue to have good prospects ahead. I don’t believe the election outcome is transformational from an AI perspective. Regulation is needed and was expected to increase, but I think it is also in the interest of the Democrats to have a vibrant and leading AI industry in the US.”
MATTHEW QUAIFE, GLOBAL HEAD OF MULTI ASSET, FIDELITY INTERNATIONAL:
“The scale of the move also appears to have been amplified by crowded positioning, leveraged investors and options-related hedging activity.”
“Historically, technical selling of this magnitude can leave markets oversold, potentially creating opportunities to add exposure.”
“Unlike previous cycles over the past few decades, the current AI investment cycle is driven primarily by capital expenditure rather than consumer spending. The nature of this cycle means it requires financing to sustain the same pace of investment, and therefore a technically driven sell-off can have an impact.”
CHRISTOPHER FORBES, HEAD OF ASIA AND MIDDLE EAST, CMC MARKETS, SINGAPORE:
“It’s actually a bit of a disaster.
“(Clients) were long index, long stocks, and they all got carried out.
