Investors try to regain their footing after tech stocks tank

Tech stocks in the U.S. steadied Friday morning after suffering one of their worst routs in years, as investors weighed the prospect of an AI investment slowdown against future gains following broad Democratic victories in the midterms.

The tech-focused Nasdaq 100 opened 1.6% higher after plunging 6.3% Thursday, its worst single-day performance since the Covid-19 pandemic as $2.3 billion in market value were erased.

The broader S&P 500 was 0.3% higher after tanking 4.4% Thursday, wiping out $2.8 trillion in paper wealth.

Investors continue to digest the results of Tuesday’s midterms that swept a crop of anti-AI and data center opponent politicians into office, including Gov.-elect Gina Hinojosa in Texas, among the largest data center markets in the country. The AI boom has comprised an ever-increasing share of stock gains and economic growth writ-large, making markets increasingly susceptible to any threat to the narrative.

“Markets are being punished according to their dependence on the U.S. AI infrastructure cycle,” Charu Chanana, chief investment strategist at Singapore-based SAXO Markets, told NBC News in emailed comments.

The newly Democrat-controlled Congress could also tighten scrutiny of the industry, including AI infrastructure projects, which could cause delays and additional costs, adding to worries investors have…

Original source: https://www.nbcnews.com/world