https://t.co/JTds9J4pQ3 【What’s Happening in the Market?】Midterm Elections Reveal Growing Concerns Over AI Investment NEW YORK STYLE / Real Voices from New York #AISummary Post-Midterm Election Stock Sell-Off and AI Bubble Worries: Outlook for U.S. Stocks 🔳 Democrats reportedly gained control of both chambers in the U.S. midterm elections The video explains that, according to projections, Democrats won majority control of both chambers in the 2026 U.S. midterm elections. Although stock prices rose the day after the election, they plunged sharply the following day, with selling pressure spreading across AI and semiconductor-related stocks. Although there was a rebound on Friday, analysts suggest it is too early to conclude the correction has ended. 🔳 89% of voters prioritized the high cost of living Citing an NBC exit poll, it was noted that 89% of voters said the cost of living was either decisive or highly important in their voting decision. Despite strong stock prices and GDP figures, public sentiment regarding daily life has not improved—highlighting that both the Trump and Biden administrations face a growing disconnect between economic indicators and citizens’ lived experiences. 🔳 Persistent decline in real wages and employment insecurity Real average hourly wages in September 2026 fell 0.7% year-over-year. Although October’s employment figures exceeded market expectations, companies announced job cuts totaling approximately 44,000 positions. Analysts note that rising employment numbers alone do not indicate improvements in income levels or job quality. 🔳 NASDAQ drops 5.5% into correction territory On November 5, U.S. markets saw the NASDAQ fall 5.5%, the S&P 500 drop 4.4%, and the Dow Jones lose $1,833. NVIDIA and Broadcom each declined over 9%, while the SOX index plunged about 12%. The NASDAQ has now fallen approximately 12% from its October high, entering a correction phase. 🔳 Friday’s rebound failed to reverse weekly losses On November 6, the NASDAQ rose 1.1% and NVIDIA rebounded about 3%. However, for the week, the NASDAQ fell 3.4%, the S&P 500 dropped 2.7%, and the Dow declined 0.9%. While short-term buying pressure emerged, analysts argue this does not confirm a solid bottom has been reached. 🔳 Growing fears over potential regulation of AI data centers Following the Democratic electoral victory, concerns have expanded over potential stricter regulations on AI data center construction. Data centers require massive amounts of electricity and water, making their environmental and cost impacts on local communities a growing political issue. 🔳 Data center construction restrictions become a focal point in Texas The video highlights that a Democratic candidate advocating for a temporary halt to data center construction won in Texas. A public opinion survey showed that 79% of voters in the state support imposing limits on the number of data centers. Concerns over strain on the power grid and water resources have become cross-party issues. 🔳 Elon Musk’s major investment plans could also be affected Potential delays or increased costs due to construction regulations are cited as risks to Elon Musk’s large-scale semiconductor manufacturing project, “Terafab,” in Texas. However, companies may shift investments to other states or overseas—making the specific details of any regulation critical. 🔳 The core issue in AI investment is recovering massive capital outlays The market’s concern is not that AI demand will vanish, but whether massive investments in data centers and semiconductor infrastructure can be recouped through future revenues. With construction and financing costs rising, the key question is whether these investments will generate sufficient sales and profits to justify them. 🔳 UBS and others remain optimistic about AI’s long-term growth Mark Haefele of UBS analyzed that the recent sell-off alone does not undermine the long-term growth outlook for AI investments. Jefferies also views the recent decline as a short-term correction driven by overlapping concerns over AI investment, policy risks, and inflation—not a sudden deterioration in corporate fundamentals. 🔳 Cautious investors warn of funding and regulatory risks Barclays analyzed that the critical issue is not AI demand itself, but who will bear the enormous construction costs. State Street noted that gains in AI-related stocks have been fueled largely by investor optimism and momentum; until political and regulatory clarity emerges, market volatility may persist. ListItemIcon Amazon’s free cash flow turns sharply negative Over the past 12 months ending September 2026, Amazon recorded a free cash flow deficit of $42.4 billion, primarily due to massive investments in AI-related infrastructure. Investors are closely monitoring whether these outlays will translate into future profitability—but a negative free cash flow does not immediately signal a financial crisis. ListItemIcon Microsoft and Google are cutting staff to control costs The video notes that Microsoft is offering voluntary severance packages to approximately 60,000 employees, while Google is reducing staff across multiple countries. Even large corporations expanding AI investments face significant challenges in securing funding and cutting expenses. ListItemIcon $63 billion in funding raised for AI infrastructureAn arrangement worth $63 billion is introduced, in which banks and investment firms provide capital to purchase AI-related equipment through special-purpose vehicles and lease it to Anthropic. While this reduces the initial burden of capital investment, it creates future lease and repayment obligations, making it critical whether AI business revenue growth proceeds as planned. 🔳 Financial institutions are also exposed to AI investment risks When AI companies finance massive capital investments through loans or leases, poor revenue performance could lead to cash flow problems. The potential for investment failures to impact not only technology firms but also the banks and investors providing financing is highlighted as a concern. 🔳 The sharp decline may be overdone, but underlying issues remain The stock price drop may have been exacerbated by large-scale position unwinding and forced liquidation of leveraged trades. However, Steve Sosnick of Interactive Brokers notes that even if prices rebound, doubts about the profitability of AI investments will not be resolved. 🔳 Chinese tech stocks also plummet sharply The STAR50 index, which includes Chinese semiconductor-related companies, fell approximately 40% from its 2026 peak through late October. The CSI300 index also dropped 8.5% in October. While China faces its own unique economic challenges and cannot be simply compared to the U.S., it is noted that technological growth and stock price appreciation are distinct issues. 🔳 Strength of U.S. employment data fuels concerns over rate hikes U.S. employment data for October exceeded market expectations. While strong employment is a positive sign for the economy, it could prolong inflationary pressures and delay Federal Reserve rate cuts. The video also noted increased expectations for a rate hike in December. 🔳 Focus on U.S. CPI on November 10 The U.S. Consumer Price Index (CPI) for October is scheduled for release on November 10. If inflation accelerates again, concerns over further rate hikes will intensify; conversely, if inflation shows signs of cooling, it could provide reassurance to equity markets. 🔳 CoreWeave and NVIDIA earnings are critical CoreWeave’s earnings on November 10 and NVIDIA’s on the 17th are highlighted as key events. While AMD reported strong sales in its data center segment, it is emphasized that future success will depend not only on revenue growth but also on generating sufficient profits and cash flow to justify capital expenditures. ipsis U.S. equities may continue to experience volatile price movements Although long-term expectations for AI demand remain intact, numerous uncertainties persist—including the recovery of massive investments, funding availability, data center regulations, inflation, and monetary policy. The analyst cautions against interpreting short-term price rebounds as a market bottom and stresses the need to monitor corporate earnings and policy developments. ipsis The analyst is holding off on additional investments and adopting a wait-and-see approach Although the VIX index exceeding 25 prompted consideration of additional equity purchases, uncertainty surrounding the costs and timelines of AI equipment investments led to a decision to remain on the sidelines. The analyst plans to proceed cautiously, monitoring corporate revenues, profits, investment returns, regulatory developments, CPI data, and Federal Reserve policy amid continued market volatility.