Investors in the sector appear to be concerned that the combination of Joe Biden’s White House win and the likelihood of Democrats controlling both houses of Congress could lead to more regulation for big tech firms, higher corporate taxes and a increased antitrust control.
But given the small majority of the party in both chambers, it remains unclear whether either will happen.
“The small advantage of Democrats, both in the Senate and in the House, will make it more difficult than many believe to promote tax increases, impose regulations and adopt some of the other unfriendly market policies that investors have been concerned about.” , said David Bahnsen, chief investment officer with The Bahnsen Group, said in a report on Wednesday.
“I suspect the initial market reaction in the technology sector to Georgia’s Senate results is a story of growth in value rather than a story of technology regulation, as there is probably a greater appetite for Silicon Valley regulation in the GOP,” he added. . .
But as technology stocks slipped on Wednesday morning, many sectors were growing in hopes of significant legislative and political changes in Washington.
The market also seems to be betting that the new DC regime could eventually receive a major infrastructure bill, which could add jobs and boost the global US economy.
“A Biden honeymoon with a Democratic Congress led by Nancy Pelosi and Charles Schumer would likely lead to more fiscal stimulus and infrastructure spending,” Philip Orlando, Federated Hermes’ chief stock market strategist, said in a report. Tuesday night. “This would serve as a temporary sugar level for the 2021 stocks.”