Investors in the sector appear to be concerned that the combination of Joe Biden’s victory in the White House and the likelihood that Democrats will control both houses of Congress could lead to more regulation for big tech companies, higher corporate taxes and increased monitoring controls. .
But given the narrow majority of the party in both chambers, it remains unclear whether any of this will happen.
“The Democrats’ small lead in both the Senate and the House will make it more difficult than many people believe to pass tax increases, introduce regulations and draft a number of other unfriendly policies that investors were concerned about,” David said. Bahnsen, chief investment officer with The Bahnsen Group, said in a report on Wednesday.
“I suspect that the initial market response in the technology sector to the Georgian Senate results is more of a growth-to-value story, rather than a technological regulatory story, as there is likely to be greater appetite for Silicon Valley regulation in the IDP,” he added. .
But as technology stocks slipped Wednesday morning, many sectors grew in hopes of significant law and policy changes in Washington.
The market also seems to be betting that the new regime in DC could eventually pass a large infrastructure bill, which could add jobs and stimulate the overall U.S. economy.
” A honeymoon in Biden with a Democratic Congress led by Nancy Pelosi and Charles Schumer is likely to result in more fiscal stimulus and infrastructure spending, ” Philip Orlando, chief stock market strategist at Federated Hermes, said in a report Tuesday night. said. “It will be a temporary sugar high for equities in 2021.”