Blue wave in Washington, red ink on Wall Street

The blue wave landed, and markets are still mopping up. Tech stocks took their biggest one-day plunge since Trump's April 2025 'Liberation Day' tariff shock on Thursday, dragging a major US tech index into correction territory and wiping roughly $3 trillion in market value. Futures point to some relief for US equities on Friday, with October nonfarm payrolls — expected to show a 65,000 gain — due later in the day.

The trigger was Tuesday's drubbing. Democrats seized the House and Senate, picking up at least 40 House seats and at least seven in the Senate, both above expectations, with inroads into Republican strongholds like Texas and Kansas. Plenty of winning Democrats made data center moratoriums a centerpiece of their campaigns, and investors read that as a direct threat to the AI capex boom.

Oil delivered its own whipsaw. Brent tumbled 9% on Wednesday to around $94 a barrel as traders bet the Republican losses reduced the odds of a fresh round of fighting with Iran, putting crude on course for its biggest weekly fall since 2020. Then fresh tanker attacks in the Gulf sent prices up nearly 4% Thursday — a warning that de-escalation isn't settled.

Washington is already talking exit. Vice President JD Vance blamed the Republican losses squarely on the Middle East conflict in a pointed social media post Wednesday, and Trump later conceded that was probably correct, while insisting the war was still worth it to stop Iran from getting a nuclear weapon. The president also said Tuesday that the US will end its $4 billion in annual military aid to Israel at the end of this year, earlier than previously anticipated.

Falling energy prices helped lift Treasuries, with the benchmark yield sliding as low as 4.82% on Thursday, its lowest since September, as investors also hunted for a safe haven from the equity selloff. South Korea's index shed more than a tenth of its value this week — its worst weekly decline since 1991. Yet the AI buildout shows few signs of stalling: a $115 billion all-stock deal for an optical components maker landed Monday, and another tech firm said Tuesday it would raise $15 billion through a five-part dollar bond sale to fund AI expansion.

Elsewhere, Apple beat revenue expectations Monday but its shares fell on worries that rising chip costs are squeezing margins. The Bank of England raised rates by 25 basis points, its first hike in three years, though several policymakers signaled markets are pricing in too much additional tightening. And the cyberattack wave rolls on: last week's Binance heist, described as the biggest cyber theft in history, the hacking of Ukraine's air defense alert systems, and supermarket freezers shutting down across Europe.