Wintermute: AI Trade Loses Washington Tailwind, S&P Falls 4.4% in a Single Day

According to a TechFlow report, on Nov. 10, crypto market maker Wintermute said in its latest weekly market report that after Democrats won both the House and Senate in the U.S. midterm elections, the market repriced AI regulatory risk and the previously priced 'Washington tailwind' disappeared; the S&P 500 fell 4.4% last Thursday, its worst single-day performance since April 2025 (Trump tariffs). Tightening expectations also rose: last Friday, U.S. nonfarm payrolls added 165,000 jobs, far above the roughly 60,000 expected, and the probability of a December rate hike rose from 67% a week earlier to about 77%. Wintermute said the market should take this seriously because wage growth is strong enough to give the Federal Reserve no reason to wait for equities to stabilize; a rate hike during an AI-led drawdown is the hardest combination for crypto assets to handle, as it drains both liquidity and risk appetite. In asset performance, Bitcoin briefly surged above $81,000 on Wednesday alongside a rebound in oil stocks, gave back all gains by Friday, and fell to $73,500 on Sunday, just above its 200-day moving average near $73,000, closing below the 50-week moving average; spot Bitcoin ETFs saw net outflows of $1.28 billion last week. Brent crude fell 13% last week, its largest weekly decline since 2020, returning to around $96 on Monday; gold rose 4.5%. Nvidia fell about 5% premarket after its board launched an independent investigation into reports that CEO Jensen Huang was targeted by foreign intelligence, ahead of its Nov. 17 earnings report.

Source: TechFlow