Published on November 05, 2026

Special Market Update: Midterm Hangover

Markets turned sharply lower as renewed concerns around AI rattled investors. But beneath the volatility, the fundamental picture remains resilient. Here’s what investors should consider now.

Written by Dan Phillips, CFA

Special Market Update: Midterm Hangover

The post-election relief rally gave way to a sharp selloff yesterday, with the S&P 500 down ~4.4% after rising ~1.6% the day before. The fundamental backdrop has not changed over the last ~24+ hours – if anything it has improved. Rather, the selloff appears to be emanating from renewed worries about the AI trade – with a reassessment of the AI regulatory risk presented by the Democratic control of Congress exacerbating ongoing concerns over the AI financing environment. At present, given still-strong underlying fundamentals, we see more reason to take advantage of the current ~4%-off sale than to de-risk investment portfolios – and would remind investors that an appropriately set risk profile (via the strategic asset allocation) is designed to weather selloffs like these.

Click to read: Special Market Update: Midterm Hangover