Democrats Projected to Take Both Chambers
The Democratic Party is now projected to win both the House and the Senate, according to The Associated Press. The AP also projected that Texas Democratic candidate Gina Hinojosa has beaten Republican incumbent Greg Abbott for governor. Hinojosa has pledged a moratorium on data centers in the key tech hub.
Some on Wall Street say a sizable Democratic majority in both chambers, the so-called blue wave scenario, would put pressure on the market, especially on stocks tied to the artificial intelligence buildout. Investors worry that a big Democratic win could bring more restrictions on data centers across the country. AI-linked stocks had already pulled back in recent weeks over concerns that data-center spending is slowing.
Tech Shares Take the Hit
Big Tech names Microsoft, Amazon and Nvidia were all trading lower in overnight trading on Robinhood. CoreWeave, a high-risk data center play, was down 4%, while Elon Musk's SpaceX was off by 5%.
Anthony Saglimbene, chief market strategist at Ameriprise Financial, said stocks "trended lower as it's looked more likely that Democrats are going to pick up the House and most likely the Senate." He added a question many investors are asking: "If you get some governorships that are Democratic, what does that mean for the data center buildout, which has already seen a lot of skepticism over the last couple weeks in terms of the hyperscaler capex spending?"
