Investors in the sector appear to be concerned that the combination of Joe Biden’s White House victory and the likelihood of Democrats controlling both houses of Congress may lead to more regulation for large technology companies, higher corporate taxes. takes greater antitrust control.
But given the narrow majority of the party in both chambers, it is still unclear whether something like this will happen.
“The small leadership of Democrats in both the Senate and the House will make it harder than many believe to pass tax hikes, impose regulations and enact some of the other unfriendly market policies that have worried investors.” said David Bahnsen, chief investment officer with The Bahnsen Group, said in a report Wednesday.
“I suspect the initial reaction of the technology market to the results of the Georgia Senate is more a story of growth in value than a history of technology regulation, as it can be said that there is more hunger for Silicon Valley regulation in the GOP “, added. .
But as technology stocks shifted Wednesday morning, many sectors were rising in hopes of significant legislative and policy changes in Washington.
The market also seems to be betting that the new DC regime may finally approve a major infrastructure bill, which could add jobs and stimulate the global US economy.
“A Biden honeymoon with a Democratic Congress led by Nancy Pelosi and Charles Schumer would likely lead to increased fiscal stimulus and infrastructure spending,” Philip Orlando, chief strategist of the Federated Hermes equity market, said in a report Tuesday night. “This would serve as a temporary sugar maximum for stocks in 2021.”