Overview
- A broad sell-off in AI-related stocks followed the Democrats' midterm wins and wiped trillions off global markets before investors looked for bargains.
- Nvidia disclosed an internal probe after CEO Jensen Huang admitted an affair with a woman reported as a possible Chinese spy, and the stock lost roughly $230 billion in market value while the company says it has found no evidence of leaked secrets.
- Markets showed signs of stabilization with the DAX trading back near its record and several Asian indexes posting gains because lower oil prices and some positive corporate results eased investor pressure.
- Chip stocks diverged as rivals such as AMD and Broadcom rallied while memory names like Micron and Sandisk fell to very low valuations that carry cyclic risk, prompting analysts to recommend shifting into higher-quality non-AI stocks or bonds for now.
- Investors are watching US October inflation data, upcoming earnings and the outcome of the Nvidia probe for clues on whether the AI derating will continue or the recovery will hold.