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 lat

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.