Southern Two Times Long Nasdaq ETF Plunges Over 10% as U.S. Midterm Elections Reshape AI Regulation Expectations and Nasdaq 100 Tumbles

The Southern Two Times Long Nasdaq ETF (07266) has plunged more than 10%, last trading down 9.58% at HK$32.48 with a turnover of HK$12.493 million.

On the news front, according to market media reports, as investors digested the policy implications of the U.S. midterm election results and chose to continue selling off artificial intelligence-themed stocks, the Nasdaq Composite Index and the Russell 2000 Index both fell into technical correction territory during the November 5 session, with the Nasdaq dropping below its 200-day moving average for the first time since April. The Nasdaq 100 Index plunged 6.36% on that day.

After Democrats secured control of both chambers of Congress in the midterm elections, the market quickly repriced the risk of "tighter AI regulation." UBS had previously noted that if Democrats controlled both chambers of Congress, data center-related companies could face stricter regulatory scrutiny. Senator Bernie Sanders' call for a nationwide moratorium on data center construction further intensified market panic.

Strategists at Pictet Asset Management Switzerland stated that AI-related stocks closely tied to Trump's policy agenda had already pulled back about 10% from recent highs before the election, and the market itself was already in the process of reassessing.