US equities: Recovery gathers pace after post-election sell-off – Rabobank

Rabobank's RaboResearch Global Economics & Markets highlights a recovery in the S&P 500, which has climbed about 3% to regain pre-November 4 levels following a steep 4.4% decline after the US Midterm elections. An 11% advance in the Philadelphia Semiconductor Index helped the Nasdaq gain 5% across two sessions. Despite the rebound, the bank warns that structural risks surrounding the US AI infrastructure buildout remain.

What is driving the S&P 500 and Nasdaq rebound?

"After collapsing 4.4% in one day last week following the US Midterm elections, the S&P 500 is starting to show signs of recovery, having moved 3% higher, back to pre-November 4 levels. Despite the unfortunate headlines surrounding Jensen Huang, the Nasdaq also made a strong recovery, having moved 5% higher over the past two sessions, supported by the Philadelphia Semiconductor Index, which managed to work its way more than 11% higher."

"But the risks facing the US AI infrastructure buildout remain."

"Unfortunately, this also sets the US behind as it seeks to reindustrialize, leaving the manufacturing gap between the US and China harder to close. But equities did well yesterday, so the market seems content to deal with these problems later."

(An Artificial Intelligence tool helped create this article, which was reviewed by an editor. Learn more.)