A strong post-midterm seasonal record gives dip buyers a historical anchor, but the AI sell-off shows that policy risk to the data centre build-out is now a live variable for tech valuations. Nvidia’s results next week are the near-term test: guidance of more than $100 billion in revenue would back the view that fundamentals have decoupled from the share price. Stickley’s link between the election result and lower oil prices matters for the inflation outlook. If oil keeps easing, it could temper Fed hike expectations, which would support equities. For now that is his interpretation, not an established trend.---History says buy the post-midterm dip, and Morgans’ Stickley is doing so carefully, with Nvidia’s results next week the first real test.Summary:Morgans’ Jack Stickley told ausbiz that the S&P 500 has risen in the six and 12 months after every midterm election since 1950, by about 14% and 15%He sees the Democratic sweep of Congress reining in parts of Trump’s agenda rather than derailing marketsHe said the chip sell-off followed a very strong run and elevated valuations, but fundamentals remain strongNvidia has a large backlog, guidance of more than $100 billion in quarterly revenue and a forward P/E around 11 times, he saidHe is adding to tech gradually ahead of Nvidia’s results next week, and favours building positions on pullbacksThe historical pattern of US stocks rallying after midterm elections remains intact despite Wall Street’s sharp technology sell-off, Jack Stickley of Australian stockbroker Morgans said in an interview with ausbiz.Since 1950, the S&P 500 has risen in both the six-month and 12-month periods following every US midterm election, Stickley said, with gains of about 14% and 15% respectively. He noted that a clean sweep of Congress by the party opposing the president has happened before, citing the Clinton era. In his view, the result mainly reins in parts of President Donald Trump’s policy agenda rather than changing the market’s direction. If the historical trend holds, he said, investors could be in for a good six to 12 months.Stickley believes the election outcome has also reshaped the macro backdrop. He said voters had pushed back against the US data centre build-out and the war, and that Democratic control of both the Senate and the House creates an incentive to end the conflict, which he said had sent oil prices lower.On technology, Stickley acknowledged the scale of the recent sell-off. He described a sudden one-day slide in which the semiconductor index fell about 12% and Nvidia around 9%, wiping roughly half a trillion dollars of market value. He said the sector had enjoyed an exceptionally strong run and that valuations had arguably become elevated. Even so, he believes the fundamentals remain strong, pointing to robust earnings growth.Nvidia is his clearest example. Stickley said the chipmaker has clear visibility, a large order backlog and guidance for more than $100 billion in revenue next quarter, while its forward price-to-earnings ratio of around 11 times looks very cheap. He suggested setting aside the personal issues facing chief executive Jensen Huang and focusing on the business. He is not buying aggressively ahead of Nvidia’s results next week, he said, but he is starting to add exposure to the sector.(Earlier: Mizuho’s Klein calls Nvidia ‘silly cheap’ below 10x earnings despite Huang uncertainty)He cautioned that upcoming catalysts will test the AI investment case, particularly around the data centre rollout and the memory and chip suppliers at its core.Closer to home, Stickley said Australian banks are holding up despite the cash rate rising to 4.85%, while consumer-facing companies are under pressure. His broader advice is to build positions gradually in high-quality names on pullbacks rather than trying to time the bottom. This article was written by Eamonn Sheridan at investinglive.com.