Several Wall Street trading desks were caught off guard when U.S. stocks sold off on Thursday, after forecasting for weeks that equities would resume their rally after the midterm elections. According to Sina Finance, teams at JPMorgan, Citadel Securities and UBS Securities had viewed the elections as a potential clearing event that could ease pre-election anxiety and encourage investors with cash on the sidelines to rebuild positions. After stocks rose on Wednesday, concerns about the AI trade increased following Democrats’ sweep of both chambers of Congress; the next day, the Nasdaq 100 lost $2.3 trillion in market capitalization, while the S&P 500 fell 4.4% and every sector ended lower. John Flood, Goldman Sachs’ head of Americas equity execution services, said the firm’s equity trading desk had one of its busiest days of the year on Wednesday, but Thursday was the opposite: client calls were overwhelming, and the desk saw little. Flood said long-only investors were again on the sidelines. After cutting risk ahead of the election, investors were caught off guard by Wednesday’s rebound and returned to the market; hedge funds are now selling some megacap cloud-provider stocks they bought in the previous session.