Capital Economics market economist Joe Mach said in a note that even if
political fears prove overblown and stocks stage a short rebound, US equities
are unlikely to reclaim early-October highs in the near term. He said the
overnight sell-off appeared driven by investor concerns that Democrats, at
federal or state level, may pursue regulation of the AI sector and limit data
center construction. Mach added that AI trade sentiment had already shown
fragility and the US market displayed several late-cycle features, so the
episode could trigger a more prolonged unwind of the AI trade.