Tech stocks plummeted on Thursday, and traders are evaluating the possible impact of the Democratic Party's sweep of both houses of Congress on cloud data centers. The Nasdaq 100 index fell 6.24%, and the Asus Semiconductor ETF, which tracks US-listed semiconductor stocks, fell more than 12%, continuing Wednesday's decline. The Dow Jones Industrial Average fell 2%, and the S&P 500 fell 3.7%. The market is increasingly concerned that the Democratic Party's full control of Congress may cause data centers to face stricter regulation, which in turn will drag down semiconductor demand. Arm Holdings' and Qualcomm's performance fell short of expectations, increasing the selling pressure on related stocks. Meanwhile, defensive sectors such as essential consumer goods, utilities, and healthcare rose. Gina Hinojosa's election as Texas governor is viewed as the worst situation data center developers face. During Greg Abbott's tenure, these companies have faced problems with project approvals suspended. Hinojosa has repeatedly called for an immediate suspension of data center development during the election campaign. Brent crude rose to around $97 per barrel. WTI rose slightly above $89 per barrel after recording its biggest decline since May on the previous trading day. The S&P 500 energy index rose 1.2%, and essential consumer goods and utilities stocks both rose at least 1%. Traders warned that market trends should not be interpreted as a fundamental shift in investor preferences. The J.P. Morgan Stock Derivatives team believes that this round of sector rotation appears to be more driven by position adjustments rather than actual fundamental rotation.

Tech stocks plummeted on Thursday, and traders are evaluating the possible impact of the Democratic Party's sweep of both houses of Congress on cloud data centers. The Nasdaq 100 index fell 6.24%, and the Asus Semiconductor ETF, which tracks US-listed semiconductor stocks, fell more than 12%, continuing Wednesday's decline. The Dow Jones Industrial Average fell 2%, and the S&P 500 fell 3.7%. The market is increasingly concerned that the Democratic Party's full control of Congress may cause data centers to face stricter regulation, which in turn will drag down semiconductor demand. Arm Holdings' and Qualcomm's performance fell short of expectations, increasing the selling pressure on related stocks. Meanwhile, defensive sectors such as essential consumer goods, utilities, and healthcare rose. Gina Hinojosa's election as Texas governor is viewed as the worst situation data center developers face. During Greg Abbott's tenure, these companies have faced problems with project approvals suspended. Hinojosa has repeatedly called for an immediate suspension of data center development during the election campaign. Brent crude rose to around $97 per barrel. WTI rose slightly above $89 per barrel after recording its biggest decline since May on the previous trading day. The S&P 500 energy index rose 1.2%, and essential consumer goods and utilities stocks both rose at least 1%. Traders warned that market trends should not be interpreted as a fundamental shift in investor preferences. The J.P. Morgan Stock Derivatives team believes that this round of sector rotation appears to be more driven by position adjustments rather than actual fundamental rotation.