Chip stocks rebound as AI trade revives and US midterms near
A 2.6% rally in the Philadelphia Semiconductor Index has pulled chip stocks back from a recent rout, lifting the Nasdaq 100 by 0.7% as investors bet the artificial-intelligence trade still has room to run.
The rebound came with fresh evidence from the companies themselves: Super Micro Computer and Advanced Micro Devices both issued revenue forecasts ahead of expectations, while Meta Platforms drew solid demand for its first bond sale in six months. Futures for South Korean and Taiwanese equity indices pointed higher, though Australian contracts fell and Japanese futures edged lower as traders returned from a holiday.
The next test arrives quickly. Millions of Americans vote on Tuesday in midterms that will decide control of Congress, with the first polls closing at 6pm Eastern time. Prediction market Polymarket is pricing roughly a 95% probability of Democrats taking the House and about a 77% chance of winning the Senate, pointing to a possible sweep of both chambers.
"The results could act as a clearing event removing some uncertainty, though developments around the AI theme and geopolitics are the primary forces driving markets heading into the final two months of the year," said Angelo Kourkafas of Edward Jones. Ken Mahoney of Mahoney Asset Management said the vote "will be good to put behind us as it has been an anticipated volatility event for quite some time."
Elsewhere, Brent crude hovered near $104 a barrel as traders weighed conflicting signals on US-Iran peace talks, with Tehran and Washington reviewing fresh proposals from mediators, according to a diplomat briefed on the matter. US job openings unexpectedly rose in September to a four-month high and layoffs fell to their lowest since March 2025, pushing Treasury yields higher and strengthening the dollar. The data may give Federal Reserve policymakers more room to focus on persistent inflation after rates were left unchanged last week, following September's first increase in three years.
What it means for Pakistan: For Pakistani investors, the AI-driven chip rally matters mainly through the Nasdaq and semiconductor exposure available via Roshan Digital Account brokerage platforms and mutual funds that track US technology indices, where a reversal after the midterms would hit rupee-denominated returns. A stronger dollar and higher Treasury yields, meanwhile, typically add pressure on the rupee and on remittance-dependent households, while oil near $104 a barrel raises Pakistan's import bill and feeds into the State Bank's inflation and rate calculations.
