Recently, tech stocks have dropped so much that it's been worrying. Many friends are eagerly awaiting the end of the U.S. midterm elections, hoping the market will rebound once the "boots are down."

But Naka Matsuzawa, a strategist at Nomura Securities, recently poured cold water on everyone: don't take elections too seriously, they won't save tech stocks.

In his report on October 30, Matsuzawa bluntly stated that the only "cure" to truly end the tech stock decline right now is for the Federal Reserve to stop raising interest rates. Before that, any bets on a rebound based on election results may fall through.

| Election impact overestimated: The market is not afraid of "regulation"

There is a general logic in the market: if the Democrats win both chambers, people will worry about a deadlock in fiscal policy and tighter AI regulation (such as restrictions on data center construction), which will negatively impact the stock market.

But Matsuzawa thinks this is pure wishful thinking. He pointed out two facts:

1. The premium has disappeared: The "event premium" related to the election in the futures market has clearly declined, indicating that capital does not care about this.

2. Stock prices fail to reflect: Those companies that theoretically fear regulation the most have not underperformed the broader market.

The conclusion is straightforward: the current decline in tech stocks has nothing to do with elections or regulation. Investors who hoped for a big rally after the election are likely to be disappointed.

| The illusion of sector rotation: confidence in AI investment has not returned

Over the past week, tech stocks looked lively inside: semiconductor stocks rebounded (the US SOX index rose 6.9% for the week), while previously resilient cloud computing and software stocks fell.

This looks like capital rotation, but in reality, it's a 'comparison of worst performances.'

Semiconductor Rebound: Lacking Sustainability, Japanese and Korean semiconductor stocks are still adjusting and have not truly emerged from the quagmire. Capital goods and machinery stocks: As leading indicators of AI investment, they showed no improvement.

What does this mean?

This means that market confidence in AI investment prospects has not substantially improved. People are very picky now—if performance exceeds expectations, they don't buy it; if it falls short, they slash hard; They don't like burning money to expand production, only prefer buyback dividends.

The current market logic is actually quite simple: it all depends on the Fed's stance.

Credit concerns: Although there was some easing this week, this was mainly because the Fed's statement was slightly more "dovish" than expected. If next week's employment data is too strong and rate hike expectations reignite, credit concerns will immediately return.

Exchange rate fluctuations: The recent strength of the US dollar is due to capital flowing back and avoiding safe havens. If the semiconductor rebound stalls, the dollar will face significant downward pressure.

Jingtai's Perspective | Don't let go until you see a rabbit

Matsuzawa made it clear: until the Fed truly stops raising rates, global tech stocks will rarely experience a systematic reversal:

1. Abandon the illusion of the "calendar effect": Don't bet on the rebound after the midterm elections—that logic doesn't hold.

2. Focus on the Fed rather than earnings reports: Before liquidity inflection points appear, surprise earnings from individual companies are unlikely to drive the entire sector.

3. Defensive Focus: Before AI investment returns are confirmed, funds will prefer companies with good cash flow and low capital expenditures.

As long as the Fed doesn't loosen its grip, the tightening shackles on tech stocks won't be lifted. Investors should tighten their wallets and patiently wait for the real "starting gun."