This is an update to the £5,000 Portfolio Challenge, Entry 4, following today’s sharp market sell-off. It covers the rebalancing we worked through in our private premium-members event, the exact trades I took and the full ISA portfolio after the session.
What happened in the market today
The S&P 500 finished down 4.4% and the Nasdaq fell 5.5%, with AI-related shares leading the sell-off. It was a sharp reversal of Wednesday’s post-election rally.
Following the Democrats’ midterm wins, investors worried that tougher scrutiny and opposition to new data centres could slow the AI build-out. That concern spread across the companies supplying chips, computing capacity and power. Markets were repricing the risk of a slower build-out.
Reuters on the data-centre sell-off
My view during the event was that crowded trades and leverage were making the move more violent. When prices fall, people trading with borrowed money can be forced to sell, which adds to the pressure. Crypto markets also saw a wave of forced liquidations alongside the stock-market sell-off.