Futures on U.S. stocks are edging higher today, having gradually erased initial losses triggered by the results of the U.S. congressional elections. However, analysts say the Democrats’ convincing midterm victory could slow the development and construction of new data centers, which was one of the key pre-election issues. Trading on U.S. stock markets officially begins at 9:30 a.m. Eastern Time (3:30 p.m. CET).
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U.S. Stocks and the U.S. Elections: Democratic Victory Threatens Data Centers
Shortly before 4:00 a.m. Eastern Time, futures on the S&P 500 index were up 0.25 percent, while futures on the tech-heavy Nasdaq 100 index were gaining 0.29 percent. Investors are meanwhile assessing the impact of the political shifts after the Democrats won control of Congress and also succeeded in important gubernatorial races. The market’s attention is focused primarily on Texas, where newly elected Democratic Governor Gina Hinojosa defeated Republican Greg Abbott. Before the election, Hinojosa had announced her intention to introduce a moratorium on the construction of new data centers, which is a major blow to the technology sector, as Texas is currently considered a key hub of American digital infrastructure.
Analysts from Wall Street warn that Democratic control of both the House of Representatives and the Senate could weigh on companies providing infrastructure for artificial intelligence (AI). Investors are increasingly worried that tighter rules on data center construction will spread to other states across the country. AI-related stocks had also already faced selling pressure in previous weeks amid general skepticism about the return on the massive capital expenditures of tech hyperscalers.
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U.S. Stocks React to Congress: Tesla and Musk Weaken, Solar Sector Gains
In overnight trading on the Robinhood platform, individual tech stocks reacted in a mixed fashion: while Microsoft shares edged lower, Amazon and Nvidia gained roughly 0.3 percent. Billionaire Elon Musk’s ventures saw a sharp drop, with SpaceX shares losing 4.8 percent and automaker Tesla shedding 4.1 percent. Shares of data center operator CoreWeave fell 3.7 percent, and Alphabet weakened by 0.6 percent. An exception was chipmaker AMD, whose shares gained about five percent in overnight trading after it reported better-than-expected quarterly revenue and profit.
While for the broader market a Democratic majority may mean an end to hopes for further corporate tax cuts and stricter oversight of banking, the green energy sector is emerging as a clear winner. The Invesco Solar ETF gained three percent in anticipation that the Democrats will block President Donald Trump’s administrative moves targeting renewable energy sources. Donald Trump himself also partly eased political tension when, in an overnight interview with The Wall Street Journal, he did not dispute the election results and said he believes in constructive cooperation between both parties.
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Source: ČTK, text edited with the help of AI
