Oil drops below $100 and chip stocks slide as investors bet on change after US vote

Markets on Thursday, 5 November, kept repricing the Democratic sweep of the US midterm elections, Reuters reported: energy prices fell, broad stock indexes held near highs, but semiconductor and AI-infrastructure shares slid again.

Oil

Brent crude dived nearly 9% on Wednesday, slipping below $100 a barrel for the first time in two months, as investors bet the election result raises the chances of an end to the US-Iran war. Prices have fallen about 20% this week, on course for the largest weekly loss since April 2020, though they partly rebounded on Thursday. Cheaper energy pushed bond yields down and kept the dollar near one-month lows against the euro.

Stocks

• The S&P 500 closed 1.6% higher on Wednesday, its biggest one-day gain in three months.
• The Philadelphia semiconductor index fell 3.1% and has lost about a quarter of its value in a month. South Korea’s chip-heavy KOSPI dropped nearly 6% on Thursday.
• Before Thursday’s open, Nasdaq 100 futures were down about 0.7%; Qualcomm fell about 11% after weak smartphone-chip sales guidance, and data-center operators and neoclouds such as CoreWeave and Nebius lost around 4%.
• Europe’s STOXX 600 rose about 0.7%, close to its August record, led by miners and banks.

Why chips

Democrats who campaigned partly on moratoriums on data-center construction won races in Texas and Georgia. BCA Research analysts said tighter data-center restrictions raise risks to the future supply of computing capacity in key build-out states such as Texas, Georgia and Ohio.