The key to understanding the post-election market gyrations is White Castle

Wall Street is surveying the damage threatened by Democrats taking over Congress – and it shouldn’t be a surprise that “indigestion,” “stomach-churning” and “puke” are the operative terms across trading floors this week.After the Dem tsunami on Tuesday night, Wednesday was supposed to be gut-wrenching for the markets.Left-wingers are now controlling the House and Senate.

DSA types and avowed progressives like James Talarico and Abdul El-Sayed won Senate seats in Texas and Michigan — states that had been red in the 2024 presidential election.But to the surprise of many, the Dow on Wednesday spiked more than 3% – or around 1,500 points – along with similarly impressive jumps in the S&P and Nasdaq, as investors took the more pollyannaish view that gridlocked government can actually be a plus for the economy and stocks.Instead, the reckoning came a day later as jitters kicked in about a socialist takeover of Capitol Hill and President Trump’s lame-duck status thwarting his pro-growth agenda.The Dow on Thursday lost nearly all its gains Wednesday.

The tech-heavy Nasdaq fell 5%.The carnage might not end anytime soon.One CEO of a major Wall Street firm predicts hedge fund liquidations adding selling pressure to stock indices including tech and AI related shares where losses will be greatest given the run up and bubble recently created in valuations.

“There are more hedge funds to be carted out,” he tells me.“We’re setting up for a market bottom.” What gives? As a reporter who has covered market zig-zags for decades, I can tell you that while this week’s whiplash has been extreme, it’s basically how price discovery on stocks always works. In other words, it’s part of investors’ collective digestive process – similar to eating a bunch of White Castle burgers.

It tastes good going down, only to spur wicked indigestion — and a literal and figurative “puke” — once it settles in your stomach.Like those greasy slabs of...