London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

The Nasdaq is skyrocketing. That may not be a great sign for the economy

The Nasdaq is skyrocketing. That may not be a great sign for the economy

When in doubt, buy Amazon.

That's the message from Wall Street as tech stocks skyrocket despite the fact no winner has been declared in the US presidential election.

The Nasdaq spiked by a staggering 3.9% Wednesday, giving the index that's home to Amazon (AMZN), Alphabet, Facebook and Microsoft (MSFT) on track for its best day in nearly seven months.

The Nasdaq is up almost twice as much as the Dow, which features more economically sensitive companies like Caterpillar (CAT) and Home Depot (HD). The Russell 2000, which is most exposed to the strength of the US economy, is barely positive at all.

In some ways, it's a replay of how tech stocks boomed during the initial phase of the recovery from the pandemic in May, June and July. The rush to buy tech stocks reflects investor sentiment that these companies will thrive even if no major stimulus package comes from a divided Congress and the economic recovery remains fragile.

"People are going back to the playbook that works if the economy is more sluggish," said Keith Lerner, chief market strategist at Truist/SunTrust Advisory. "When people get defensive about the economy, they buy tech."

Sticking with the pandemic winners as gridlock looms


Nasdaq futures rose so much overnight as election results trickled in that trading reportedly had to be halted.

Amazon, Google owner Alphabet (GOOGL) and Facebook (FB) — all winners during the pandemic — are all up 5% or more in midday trading. By contrast, companies that need a strong economy to do well, such as Ford (F), Wells Fargo (WFC) and Boeing (BA) are trading flat or losing ground.

"Just like animals, investors herd in the face of danger or uncertainty by following the strongest in the pack," Scott Yonker, associate finance professor at Cornell University, wrote in a report Wednesday. "For investors, this means pouring money into recent 'winners.'"

The key takeaway is that while the race for the White House remains in play, investors have lost confidence in a blue wave.

The chances of Democratic-control of the US Senate has plunged on prediction platform PredictIt. It now costs about 89 cents to win $1 if Republicans win the Senate, compared with just 46 cents the day before the election.

That's a crucial shift, because markets had previously expected Democrats would sweep, paving the way for powerful fiscal stimulus that would help non-tech companies.

"The only firm conclusion is that the 'Blue Wave' has receded before reaching shore, and that the prospects for a stimulus package remain undiminished," Christopher Smart, chief global strategist at the Barings Investment Institute, wrote in a report Wednesday.

What happens to fiscal stimulus now?


If Democrats controlled both the White House and the Senate, economists expected faster economic growth and a bold fiscal stimulus package worth at least $2 trillion.

That scenario led investors to buy economically sensitive stocks in the weeks ahead of the election.

"People rotated into cheap, beaten-up areas in anticipation of stimulus," said Truist's Lerner. "Now, the market is concerned about the size of the fiscal package."

Fiscal stimulus is still expected if government is divided, but it may not be as large as it would be under a blue wave.

Tech stocks also may benefit from gridlock because it lowers the chances of a sweeping crackdown from Congress. Although antitrust investigations may continue, Republicans and Democrats are unlikely to agree on major new legislation.

"The increasing likelihood of a divided Congress," wrote Mike Loewengart, managing director of investment strategy at E*Trade, "puts a damper on hopes for increased regulation against this sector."

The surge in tech stocks Wednesday stands in stark contrast to how the sector performed in 2000, when investors grappled with a contested election. But back then, investors already had lost confidence in tech stocks as the dotcom bubble imploded.

Newsletter

Related Articles

0:00
0:00
Close
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
×