Midterms didn’t appear to have huge impact, though predicted wins for Democrats could mean more regulation

US tech stocks made a recovery on Tuesday afternoon after a selloff spooked investors over AI spending.

Tuesday’s midterm elections didn’t appear to have a huge impact on Wall Street, though investors are predicting Democrats get at least a majority in the House and potentially gain seats in the Senate, which could lead to more AI regulation.

Big tech stocks falter as investors question whether billions being poured into AI can generate returns quickly enough

A sell-off of tech stocks that began earlier this month and gained steam with disappointing earnings from leading tech companies drove US markets down by hundreds of billions of dollars on Friday. In total, the decline has knocked nearly $1tn in value off the tech-heavy Nasdaq exchange in one week and erased about $2tn in a month.

The S&P 500, the index of the 500 most valuable companies in the US, fell by more than 1% Friday, losing hundreds of billions of dollars in market value. It was on track to erase its gain for October, even though it set its all-time high during the same month. The weakness for technology stocks dragged the Nasdaq composite down even further, more than 3%, also erasing hundreds of billions in value. The Dow Jones Industrial Average fell less.