U.S. tech stocks recouped losses amid concerns over AI spending

On Tuesday, U.S. technology stocks recovered after a sell-off triggered by investors’ concerns about AI spending. The S&P 500 rose 0.37%, the Nasdaq gained 0.83%, and the Dow Jones fell 0.38%. The midterm elections to Congress appeared to have little effect on the market. Investors expect Democrats to win at least a majority in the House of Representatives and possibly add seats in the Senate, which could lead to tighter AI regulation.

U.S. tech stocks recouped some losses amid concerns over AI spending

How the indexes and stocks moved

The Dow Jones fell after Apple shares dropped 1.9%. The company issued a margin forecast below expectations, citing higher memory-chip costs.

Nvidia rose 2.3% after four sessions of declines. Shares in other chipmakers also gained, including Advanced Micro Devices, Broadcom, and Micron Technology.

A brief sell-off in technology and AI-related stocks that began last week ended on Tuesday. In October, the Nasdaq posted its steepest monthly decline since March 2025, then closed in correction territory on Monday, down 10% from its record close on October 6.

What supported the market

A slight drop in oil prices, amid the possibility of new talks with Iran and Russia, also eased investors’ concerns. On Tuesday, Brent, the global oil benchmark, fell to $103 a barrel from $117 at the end of October.

Many Americans consider the rising cost of living one of the main factors in Tuesday’s vote. Meanwhile, the stock market continued to climb, driven by investment in AI, particularly in chips and infrastructure for the technology. Since the start of the year, the S&P 500 has gained 10%, the Nasdaq 9%, and the Dow Jones 7%.

A CNBC analysis of market performance after midterm elections from 1980 to 2024 found that stocks typically rise after the vote. Investors are often nervous about uncertainty over the results beforehand, but the market recovers once the outcome is clear.

Dataist’s take: The indexes’ recovery does not dispel investor caution over AI spending: the sell-off hit technology stocks, and tighter regulation remains a possible consequence of the election results. The historical tendency for stocks to rise after midterm elections describes past performance, but does not in itself explain how the market will behave this time.