Wintermute: AI trade loses Washington tailwind, S&P falls 4.4% in a single day

Democrats' sweep of both chambers of Congress in the U.S. midterms erased the "Washington tailwind" that AI-linked assets had been pricing in, with the S&P 500 falling 4.4% on Thursday—its worst single day since April 2025—as markets repriced AI regulatory risk, Wintermute said in its weekly market report. Rate-hike odds for December jumped to roughly 77% from 67% a week earlier after Friday's nonfarm payrolls came in at 165,000 versus expectations near 60,000, a combination Wintermute called the hardest backdrop for crypto because it drains liquidity and risk appetite simultaneously. Bitcoin briefly rallied to $81,000 on Wednesday before giving back all gains, sliding to $73,500 on Sunday—just above its 200-day moving average near $73,000—and closing below its 50-week moving average, while spot bitcoin ETFs saw $12.8 billion in net outflows for the week. Brent crude fell 13% for its largest weekly drop since 2020 before recovering to about $96 on Monday, and gold rose 4.5%. Nvidia fell about 5% premarket after its board launched an independent investigation into reports that CEO Jensen Huang was targeted by foreign intelligence, ahead of its November 17 earnings.