The same midterm result that sold oil on Wednesday sold artificial intelligence on Thursday, and the second leg has no scheduled end date. Wednesday closed with the VIX at 16.61, Brent down 8.7% to $94.62 and the S&P/TSX Composite up 2.28% to 36,341.40. By Thursday the S&P 500 had fallen 4.36% to 7,353.73, the Nasdaq Composite 5.52% to 24,315.00 and the Dow Jones Industrial Average 3.44% to 51,523.06, the worst day for all three since April 2025.
A Dated Event Resolved and an Undated One Took Its Place
The VIX closed at 16.61 on Wednesday, below its 16.91 close on the day of the Bank of Canada hike, and reached 26.95 at 3:47 PM ET on Thursday, the highest reading in a series that began Oct. 1.
The VIX measures 30-day implied volatility on S&P 500 options. The Nov. 5 value is the 3:47 PM ET reading and may differ from the final settlement.
The two readings measure different risks. At 16.61 the index priced the end of a dated event, an election with an outcome unknown until Tuesday night. At 26.95, up about 62% on the day and the largest one-day jump in more than two years, it priced a risk with no calendar: the possibility, raised by the Democratic sweep, that governments could force pauses in data centre construction. That would mean fewer AI chip orders and less demand for the power and services around them. Nvidia fell 8.3% and Advanced Micro Devices 15.9% in the Associated Press report, and CNBC put the iShares Semiconductor ETF down close to 11%.
The morning framework held that selling clusters ahead of a known date and fades once the date passes. Thursday adds the second half: a volatility reading that falls when a date resolves can be rebuilt immediately by a risk that has none.
The Bank of England Conditioned Its Next Move on an Oil Price Set by Politics
The Bank of England raised its rate to 4% from 3.75% in an 8-1 vote, its first hike since 2023, with one member favouring a larger increase. Governor Bailey said the move should not be read as the first of a long sequence, and the bank indicated that the sharp fall in energy prices after the midterms, if sustained, could limit further hikes. It also projects inflation reaching 5% by mid-2027.
The condition rests on a price that moved on a political read. The Geopolitical desk established Wednesday morning that no ceasefire is in place and that mines were reported at the Strait of Hormuz. By late Thursday WTI was near $90, up about 3% from the $88.12 settle, on doubts about a U.S.-Iran deal, and Brent was near $97 against $94.62.
The Bank of Canada faces the same input. It raised its rate to 2.5% on Oct. 28 with core inflation below 2% and 41,200 jobs lost, a decision the Economy desk tied to the bank forecast, and its next decision on Dec. 9 also sets the deadline for the income-splitting window the Tax and Wealth desk flagged against the 3% prescribed rate. Both calendars now run through an oil price that two days of politics moved down 8.7% and then up roughly 3% with no ceasefire in place.
Toronto Absorbed About Half the Loss Because Oil and Gold Moved the Other Way
The S&P/TSX Composite rose 2.28% on Wednesday as WTI fell 8.29%, and was down 2.13% at 3:30 PM ET on Thursday as WTI recovered, which leaves the index roughly 4% below its August record of 37,069.11.
The plotted series ends at the Nov. 4 close because the official Nov. 5 close was not published at the 4:00 PM cut. The Nov. 5 decline of 2.13% is the Investing.com figure at 3:30 PM ET.
The Canadian benchmark moved against crude on both days, so oil was not what drove it. The Canadian Press attributed Thursday weakness to technology and base metals, and Trading Economics tied Wednesday gain to hopes of easing Canada-U.S. trade tensions. Oil near $90 and gold near $4,111, up 0.94%, acted as the cushion, and the Canadian dollar eased only to 71.44 cents U.S. at midday from 71.63.
The exposure that matters at Friday open is the U.S. technology sleeve inside balanced Canadian portfolios, which took the Nasdaq decline of 5.52% while the Toronto sleeve took about half of the S&P 500 loss.