Wall Street awaits midterms amid concerns over AI investment
Investors are weighing election risks against concerns about costly AI investment and disappointing margins at technology companies.
Listen to this article
There is no audio version yet. Request one and an AI voice will read the article aloud.
Read by an AI voice.
.jpg){kind=link}
US stock futures moved in different directions on Tuesday as investors waited for the first results from the midterm elections. Reuters also describes investor concerns about disappointing reports from technology companies and the scale of AI investment.
Apple fell 3.9 per cent in pre-market trading after the company warned that more expensive memory chips could weigh on gross margins during the forthcoming holiday season. Palantir also came under pressure: the company raised its revenue forecast, but the share price nevertheless fell 7.7 per cent.
According to Reuters, the Nasdaq-100 closed more than 10 per cent below its highest-ever closing level on Monday. Reuters says this represents a correction in the technology index. Investors are questioning whether high spending on artificial intelligence will generate returns quickly enough.
Show the figures
| Futures | |
|---|---|
| S&P 500 | -0.19% |
| Nasdaq-100 | 0.13% |
| Dow Jones | -0.94% |
| Russell 3000 | -0.43% |
That doubt is affecting more than share prices. Several technology companies have issued bonds to finance major AI projects, according to Reuters. If interest rates remain high, financing costs could rise, making it harder to justify investments through future returns.
The elections add a second uncertainty. Non-partisan analysts and polls cited by Reuters on Tuesday mainly expected the Democrats to have a chance of regaining the House of Representatives; the balance of power in the Senate remained unclear. A divided Congress could make it harder to pass major new budgetary measures.
The market reaction is therefore not clear-cut. Societe Generale warned of concerns about government spending and deficits, according to Reuters, while Morgan Stanley expected the elections to remove an important uncertainty. These differing assessments are not a prediction of the result or of the direction of the stock market.
Also show the region and a close-up
Both sides of the figures
▲ Bright spots
- Pfizer raised its full-year revenue and profit forecasts, according to Reuters.
- AMD, Marvell and Intel rose by 1.8, 1.4 and 2.1 per cent respectively in morning trading, according to Reuters.
▼ Concerns
- Apple warned that higher memory-chip costs could weigh on gross margins.
- The Nasdaq-100 was more than 10 per cent below its record close, according to Reuters, while investors questioned the returns on AI spending.
Critical note
This news concerns market valuations and expectations, not household production or income. The share-price movements mentioned are snapshots; they do not indicate that the US economy as a whole is contracting.
Who notices what
- Investors
- They are being presented with election uncertainty, higher financing risks and varying corporate forecasts at the same time.
- Businesses
- For technology companies, debt financing for AI could become more expensive or subject to more critical scrutiny.
- Workers
- The market movements do not yet show whether AI investment will create jobs or instead lead to reorganisations.
Where economists disagree
Morgan Stanley expected the elections to remove an important uncertainty, according to Reuters, while Societe Generale warned of concerns about spending and deficits. Reuters presents this as differing analysts' views, not an established outcome.
Every point comes from the article’s sources and was included in the fact check.
One story, several perspectives
What is established
- US stock futures were mixed on Tuesday.
- Apple warned of higher memory costs and pressure on gross margins.
- Investors were waiting for the result of the midterm elections.
- Reuters reported concerns about the financing and returns of AI investment.
Left
Arguments Emphasises that large technology companies are consuming public infrastructure, energy and capital without the social return or distribution of profits being established.
Values Workers' rights, the public interest and the distribution of wealth.
Consequences Fears that debt financing and AI investment will place risks on workers, taxpayers and small businesses.
Centre
Arguments Sees scope for AI investment as long as returns, competition and financial risks are monitored transparently.
Values Innovation, prudence and institutional stability.
Consequences Wants to prevent short-term politics from blocking necessary investment, while also ensuring that a bubble does not become a systemic risk.
Right
Arguments Emphasises that investors and companies need room to innovate quickly, and that elections should primarily deliver predictability and lower uncertainty.
Values Market freedom, entrepreneurship and competitiveness.
Consequences Fears that new budgetary burdens, regulation or political deadlock will weaken US technology companies.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
Fact-check Approved · Nour Haddad — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The economic figures are taken from the Reuters publication covering the same trading day and are described as snapshots. The text distinguishes between established share-price movements and analysts' expectations.
- confirmed Apple fell 3.9 per cent in pre-market trading. — Reuters reports this movement following the warning about memory chips. source
- confirmed The Nasdaq-100 closed more than 10 per cent below its highest closing level. — Reuters describes this as a correction. source
- confirmed Palantir fell 7.7 per cent despite a higher revenue forecast. — Reuters mentions both facts. source
Editor's note
The futures and share-price movements are snapshots from morning trading. The political consequences of the elections and the market's eventual reaction were not yet fully known at 10.15pm.Sources
- Wall St futures mixed as Apple falls on margin warning, midterm results awaited — Reuters via MarketScreener
- Nvidia and other Big Tech stocks lift Wall Street — AP
More on this in Dutch media
- RTL Nieuws — „wall street”
- FD — „wall street”
- AD — „wall street”