A week, as the adage goes, is a long time in politics.

Last week’s US mid-term election (Nov 4) dealt a severe blow to Trump’s administration. Going forward, the president’s modus operandi will likely differ drastically. 

One example is the Iranian conflict, which is slowly being wound down. President Trump himself declared this week that (Nov 9): “Iran militarily is effectively over”.   

This time, the market seems to believe this statement. Crude oil prices, for instance, have slumped by more than 15 percent in two weeks. The multi-month uptrend progression has decisively broken down (Chart 1).

The mid-term election also upended a few popular trades, including the AI sector. 

AI stocks started to wobble soon after the election. Then, these modest selling cascaded into a full-scale panic. Investors fear that Democrats-controlled congress will slow (or even squash) the AI infrastructure buildout programme.

Numerous AI stocks immediately crashed into 52-week lows. Even big names like Sandisk (SNDK) and Micron Technology (MU) weren’t spared from the carnage. 

Volatility spiked; numerous stops triggered. 

What ended last week's indiscriminate selling were oversold technicals, overstretched downtrends and bargain hunting.

Even Anthropic came out to support the industry. It said that IPO is still going ahead despite heavy market turbulence. Today, the firm announces a projected $1.4 trillion valuation and aims to raise in excess of $60 billion. This will be one of the largest IPOs in the annals of market history.

AI bulls assume that nothing much has changed. The industry is still expanding quickly, whilst the underlying technology is improving all the time. Computer components like memory is continuing to experience shortage, thus bringing unprecedented profits to companies like Samsung Electronics (005930). 

Did you know Samsung recently reported one of the largest quarterly net profits ever? In third quarter of 2026, it raked in US$56 billion (KRW 75.1 trillion) of net profits. In comparison, UK Big Four banks earned ‘only’ $17 billion (£13 billion) in half a year! Technical support may be emerging on its stock (Chart 2).

As these shortages continue (Apple anticipates memory prices to keep rising next year), this means another year of monster earnings for many tech suppliers. A modest technical rebound for many AI-related stocks is not to be ruled out.

Bull trends in Healthcare & Staples accelerating

Still, the US election has damaged the AI trade and investors are no longer throwing money at it indiscriminately. 

In fact, the market is discovering - again - the benefit of ‘diversification’. Capital have recently flowed to two particular sectors:

• Consumer Staples
• Healthcare

Both appear to be defensive plays in a hedge against the faltering AI/tech stocks. And both sectors have been registering many new all-time highs. 

Look at Eli Lily (LLY), the first health-care stock to hit $1 trillion market cap. Its bull run is continuing apace despite the shaky market sentiment. 

Moderna (MRNA) is another biotech stock rocketing to long-term highs. Edward Lifesciences (EW) broke out of a massive base. I anticipate more breakouts coming out of the sector.  

For consumer staples, it is interesting to note that even some UK staple names are heading north. 

Marks & Spencer (MKS) broke out of its multi-year stupor with a decisive move above the 400p ceiling (Chart 4). Further gains to the round number 500p anticipated. Tesco (TSCO) is too swinging to new long-term highs.  

In the US, big staples like Walmart (WMT), Coca-cola (KO) and Costco (COST) are rallying into long-term highs.

Conclusion

While AI stocks have rebounded sharply this week, over the medium term supply may continue to weigh on the sector.  The two massive IPOs - Anthropic and OpenAI - may cap the sector's upside for the time being.

As a result, investors are pivoting to other more defensive plays and that’s where I expect more new long-term highs to be printed into the yearend.