Overnight US stocks | All three major stock indices fell together; under the aftershock of the midterm elections, the Nasdaq plunged more than 5%! Nvidia tumbled 9%, and the "fear index" soared.

Thursday saw all three major US stock indices plunge sharply. Democrats winning both chambers of Congress in the midterm elections raised market concerns that the new legislative majority would tighten regulation on artificial intelligence (AI)-related spending and data center construction, with the political shockwave detonating in the stock market with a delay. Tech stocks suffered a "bloodbath," and the AI hardware supply chain saw broad-based selling. The "fear index" VIX soared. Oil prices rose. Gold rallied then pulled back. [US Stocks] At the close, the Dow Jones Industrial Average fell 1,833.06 points, or 3.44%, to 51,523.06; the S&P 500 fell 334.89 points, or 4.36%, to 7,353.73; the Nasdaq Composite fell 1,421.52 points, or 5.52%, to 24,315.00. Democrats taking control of Congress in the midterm elections triggered market concerns over stricter regulation of the AI industry, and the AI hardware supply chain saw broad-based selling, with chip, memory, semiconductor equipment and optical communications sectors falling broadly and sharply. The Philadelphia Semiconductor Index plunged 12% in a single day, its biggest drop since 2020. NVIDIA Corporation (NVDA.US) fell 9% in a single day, erasing all of its year-to-date gains; AMD (AMD.US) fell more than 17%. Memory stocks suffered a "bloodbath," with SanDisk (SNDK.US) plunging 22%, while Western Digital Corporation (WDC.US) and Micron Technology, Inc. (MU.US) fell more than 17%. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) fell nearly 11%, and ASML Holding NV ADR (ASML.US) fell more than 9%. Lumentum (LITE.US) and Credo Technology (CRDO.US) fell nearly 18%, and Marvell Technology, Inc. (MRVL.US) fell more than 16%. Neocloud-related stocks also saw selling, with CoreWeave (CRWV.US) falling another 10%. In addition, the "fear index" VIX soared 70% to its highest level since early April. [European Stocks] Germany's DAX30 fell 112.66 points, or 0.43%, to 26,325.01; the UK's FTSE 100 fell 46.55 points, or 0.43%, to 10,782.66; France's CAC40 rose 27.48 points, or 0.34%, to 8,205.37; the Euro Stoxx 50 fell 17.86 points, or 0.29%, to 6,247.85; Spain's IBEX35 rose 115.10 points, or 0.59%, to 19,486.00; Italy's FTSE MIB fell 525.15 points, or 1.03%, to 50,505.87. [Asia-Pacific Stocks] Japan's Nikkei 225 fell 1.79%, South Korea's KOSPI fell 5.28%, India's BSE SENSEX rose 2.60%, and Indonesia's composite index rose 2.25%. [Forex] The US Dollar Index (DXY), which measures a basket of six major currencies, rose 0.02% to 101.58. [Cryptocurrencies] Cryptocurrencies declined. Over the past 24 hours, Bitcoin fell more than 6% to $7.53, giving back all of the previous day's gains; Ethereum fell nearly 9% to $2,210.7. [Precious Metals] In late New York trading on Thursday (Nov 5), spot gold rose 0.7% to $4,089.15/oz, trading higher for almost the entire day, rising significantly in the Asia-Pacific morning before fluctuating lower, and showing a W-shaped trajectory in the US morning. Spot silver fell 0.84% to $51.7798/oz. [Crude Oil] WTI December crude futures settled up $2.40, or more than 2.72%, at $90.52/barrel, moving away from the lowest close since Oct 7 of $88.12, and rising continuously since the Asia-Pacific midday. Brent January crude futures settled up $3.67, or nearly 3.88%, at $98.29/barrel. [Metals] LME copper fell $168 to $13,844/ton. LME aluminum rose $17 to $3,064/ton. LME zinc fell $14 to $3,793/ton. LME lead rose $12 to $1,894/ton. LME nickel rose $543 to $16,322/ton. LME tin fell $1,516 to $45,479/ton. LME cobalt was flat. [Macro News] Goldman Sachs Group, Inc. trading desk "phones blown up but no buyers in sight": midterm election results trigger AI trade unwind, Nasdaq sheds over $2 trillion in a single day. In Thursday's overnight US session, Goldman Sachs Group, Inc.'s equity trading desk was inundated with investor inquirieseveryone asking the same question: how deep will the tech selloff go? Yet buyers actually stepping in to catch the falling knife were hard to find. According to John Flood, head of Americas equity execution services at Goldman Sachs Group, Inc., Wednesday (midterm election day) was one of the busiest trading days of the year for the bank's equity desk. By Thursday, the picture was the exact opposite. "Today it's completely reversed," Flood wrote in a note to clients on Thursday. "Our phones are blown up with inquiries about the market. Unfortunately, we're not seeing much (actual trading)." Flood said long-only institutions have once again fallen into a wait-and-see freeze. These investors had aggressively cut risk exposure before the midterms, were caught off guard by Wednesday's rebound and drawn back into the marketand now hedge funds are selling the AI hyperscaler stocks they had just bought the previous trading day. More worrying for the market is the absence of bids. According to Goldman Sachs Group, Inc. client feedback, brokerages with large retail exposure reported a second consecutive day of significant net selling imbalance among retail investors. Market bets on December rate hike probability fall to 70%: Fed hawks insist on "small, steady steps." On Thursday, two Fed officials publicly advocated raising rates in small, steady increments to counter inflation still above target. This was the central bank officials' first public remarks after the midterm elections in which Democrats won control of Congress and expanded seats at the state level, potentially altering the path of price pressures in the economy. Cleveland Fed President Beth Hammack said in a speech ahead of an event in Zurich: "I expect monetary policy will need to move to a restrictive stance to bring inflation back to 2% in a timely manner." One of the central bank's most steadfast supporters of rate hikes believes the stance should be achieved "through more frequent, small adjustments where possible"an approach less disruptive to households, businesses and financial markets. She also said gradual hikes help prevent an "inflation mindset" from taking root among the public. Richmond Fed President Thomas Barkin, speaking in Charlotte, echoed Hammack's path judgment. He said inflation is "too high" and is "sitting high" rather than coming down. For central bank officials, "the policy implication is fairly straightforward," and as for the pace of future hikes, "gradual is reasonable." US Treasuries in demand, curve bull-steepens. The stock market rout provided strong safe-haven buying support for US Treasuries. On Thursday, the 10-year Treasury yield fell about 6 basis points to 4.83%, while the 2-year yield had cumulatively fallen about 17 basis points since the prior session, with the yield curve showing a typical bull-steepening pattern. The Treasury market interpreted a Democratic sweep of Congress more as a signal of fiscal constraintpolitical gridlock between a Republican White House and a Democratic Congress could constrain the Trump administration's legislative agenda of tax cuts and spending expansion, thereby reducing expected medium-term Treasury issuance supply. Meanwhile, reports said South Korea is reportedly considering large-scale purchases of long-term US Treasuries as one measure to bolster foreign exchange reserves and strengthen economic ties with Washington, providing potential incremental support for Treasury demand. South Korea has denied media reports that the government is considering large-scale purchases of long-term US Treasuries to increase foreign exchange reserves. [Individual Stock News] IREN (IREN.US) Q1 AI cloud revenue surges 182% QoQ, with $20 billion in backlog. The company posted quarterly revenue of $228 million, up 66% QoQ, beating market expectations of $221 million; net loss of $263 million, sharply narrower than $684 million in the previous quarter; adjusted EBITDA of $66 million, up 247% QoQ, with an adjusted EBITDA margin of 29%; loss per share of 66 cents, versus market expectations of a 48-cent loss per share. The AI cloud business was the absolute star of the quarter. AI cloud revenue reached $200 million, up 182% QoQ ($71 million in the prior quarter), of which AI cloud services revenue was $135 million and AI cloud leasing revenue was $65 million; the AI cloud segment gross margin reached 86%, flat with the prior quarter. The core driver of the revenue jump was delivery of the Horizon 1 data center. The company's operating IT capacity (IT-MW) grew 127% QoQ, from 41 megawatts to 93 megawatts (about 0.1GW). Airbnb, Inc. Class A (ABNB.US) Q3 accelerates across the board: revenue up 19%, fastest in over three years, new $12 billion buyback, and full-year guidance raised. The earnings report showed Airbnb's third-quarter revenue was $4.87 billion, up 19% YoY (up 16% on a constant-currency basis), beating market expectations of $4.75 billion and marking the company's fastest revenue growth in more than three years; gross booking value (GBV) was $27.7 billion, up 21% YoY, accelerating by 5 percentage points QoQ; nights and seats booked reached 155 million, up 16% YoYa significant acceleration from 10% in Q2 and 9% in the year-ago period. Profitability was also strong: net income of $1.89 billion, up 38% YoY, with a net margin of 39%; diluted earnings per share of $3.16, beating market expectations of $2.85 ($2.21 in the year-ago period). Capital returns were significantly stepped up: the company repurchased $700 million of Class A shares in the quarter and announced a new buyback authorization of up to $12 billioncombined with the previous remaining authorization of $2.7 billion, total "firepower" is nearly $15 billion. Q3 results and guidance both beat expectations, Cloudflare surges after hours. The earnings report showed Cloudflare's third-quarter adjusted earnings per share (EPS) was $0.38, versus analyst expectations of $0.35; third-quarter adjusted operating profit was $137.1 million, versus analyst expectations of $130.1 million; third-quarter revenue was $782.5 million, versus analyst expectations of $741.6 million. The company expects full-year revenue of about $2.96 billion, versus its prior forecast of $2.86 billion-$2.87 billion; it expects fourth-quarter revenue of $845 million-$846 million, versus analyst expectations of $799 million. In the tech-stock-driven credit downturn, SpaceX (SPCX.US) default risk hits record high. As concerns over tighter regulation of the AI industry resurfaced, Musk's space exploration company SpaceX and CoreWeave became among the hardest-hit entities in a broad credit downturn. The yield on one of CoreWeave's bonds soared to a record high of more than 17%. Meanwhile, the cost of insuring against a SpaceX debt default (CDS, credit default swaps) also rose to a record high. Market observers warned that a Democratic sweep could strengthen the party's ability to scrutinize Elon Musk's actions and hinder an expected merger between SpaceX and Tesla, Inc. (TSLA.US). Alphabet Inc. Class C (GOOGL.US) to invest $17 billion to build its first data center in Wyoming, US. Alphabet Inc. Class C committed $17 billion to build Alphabet Inc. Class C's first data center in Wyoming, and signed binding agreements with Tallgrass Energy, Black Hills Energy, American Electric Power and Related Digital to bring jobs and infrastructure to Laramie County. Alphabet Inc. Class C is providing $17 billion in capital, and Bloom Energy is providing fuel cell technology. The project includes a 702-megawatt fuel cell development project equipped with carbon capture and storage, and has signed a contract with American Electric Power Company, Inc. (AEP).