The US stock market faced heavy selling pressure, especially in technology and semiconductor sectors, with the Nasdaq index dropping over 5.52%. The global chip index plunged at its steepest since the COVID-19 crisis, triggering ripple effects across Asian stock markets, including Thailand, where electronics component stocks were heavily sold off from market open.
Following the US midterm elections where the Democratic Party secured majorities in both chambers, investors worry the government will tighten regulations overseeing the AI industry and may delay or halt large data center projects in several states, including revoking tax incentives.
However, analysts view the market reaction as "overly panicked" because if the US encounters regulatory obstacles, major cloud service providers can flexibly shift their data center infrastructure investments to other countries.
The US midterm election caused a major political and economic shockwave globally as results clearly showed the Democrats achieving a decisive "Blue Wave" victory.
They regained majority control in both the House of Representatives and Senate and won key governorships like Texas and Ohio, signaling a significant shift toward stricter economic policy regulation in the US.
This election outcome led to a sharp decline in the US stock market last night: the Dow Jones fell over 1,800 points (-3.4%), the S&P 500 dropped 4.36%, and the Nasdaq plummeted 5.52% to close at 24,315 points.
The semiconductor index (SOX) plunged 12%—its steepest single-day drop since March 2020—led by NVIDIA’s 9.26% fall, wiping out over $440 billion in market value, and Micron Technology’s 17.00% plunge.
The US sell-off also impacted Asian markets this morning, with Thai electronics component stocks falling in the morning session: DELTA down 4.01%, KCE down 6.04%, HANA down 7.88%, CCET down 3.97%, and SMT down 4.86%, among others.
Pae Brokerage's analysis states that the sharp decline in US semiconductor stocks appears to be "excessive panic" because if US development faces legal or regulatory constraints, hyperscale operators can flexibly shift budgets to build data centers in other countries or regions.
Additionally, third-quarter 2026 earnings show most tech companies continue to increase capital expenditure and seek funding, while the recent sell-off partly results from forced margin calls after rapid 10-20% share price drops.
However, external pressure could negatively affect Thai electronics component stocks like DELTA, HANA, and KCE, as well as overall investment sentiment.
In the short term, investors are advised to "Wait & See" for market stability before investing in tech stocks, viewing market dips as opportunities to accumulate strong fundamental, high-dividend value stocks such as telecommunications (ADVANC), banks (BBL, KBANK, SCB), retail (CPALL), or defensive stocks like hospitals (BDMS, BH, BCH).
Innovest X Brokerage assesses that the Thai stock market is likely to decline alongside regional markets, as the global tech sell-off entering a correction phase will continue to weigh negatively on Thai electronics firms like DELTA, HANA, and KCE.
Concerns center on the Democrats’ victory leading to stricter AI industry controls, including environmental and energy use regulations for data centers, and potential revocation of tax incentives.
However, in the short term, the SET Index is expected to trade sideways because the Democrats’ decisive congressional win reduces political policy uncertainty from another perspective.
Investment strategy recommends a "Selective Buy" approach focusing on buying on dips, especially in FDI & Tech-Infra sectors benefiting from domestic investment cycles and Thailand’s cabinet data center regulations, such as industrial estates (WHA, AMATA) and renewable energy power plants (GULF, GPSC), alongside stocks with strong third-quarter earnings growth.
Asia Plus Brokerage reveals in analysis that the Blue Sweep phenomenon from the US midterms directly negatively impacts the AI supply chain, since US data centers are concentrated in three key states: Texas, Georgia, and Ohio, totaling 924 sites (20% of the US), with 368 planned projects (23.7% nationwide).
New Democratic governors have campaigned to halt data center construction and cancel tax breaks for major developers, exerting downward pressure that drove the semiconductor index sharply lower.
Statistically, the Nasdaq’s 5.52% one-day plunge is a severe -4.34 Sigma event, and historically, recoveries have not been V-shaped, averaging 17.5 months, making "catching the falling knife" a high-risk move.
In the Thai market, capital rotation is evident as funds flow out of electronics and commodities into defensive and domestic consumption stocks; investors are advised to avoid tech stocks and shift portfolios toward safe havens like hospitals (BCH, BDMS) and power plants (BGRIM, GPSC).
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