US markets rally while datacentre stocks slide after Democratic wins

US and European stocks advanced after Democrats secured control of Congress, while government bonds rallied and the dollar weakened. Investors anticipated greater constraints on Donald Trump’s policy agenda, spending and borrowing. The Dow Jones gained 2.5%, the S&P 500 rose 1.5% and the Nasdaq climbed 2.5%, reversing an overnight decline in stock futures.

AI infrastructure companies bucked the broader rally as investors weighed tougher oversight of datacentre development. CoreWeave fell 4.8%, IREN dropped 9.6% and Applied Digital Corporation lost 4.8%. Democrats also won governorship races in Texas and Georgia, important datacentre markets where opposition to energy-hungry facilities has grown. Incoming Texas governor Gina Hinojosa has repeatedly called for a moratorium on new datacentres. Analysts expect developers to face tighter project conditions and greater pressure to cover infrastructure costs, although some do not foresee a significant slowdown in AI investment.

Major technology companies gained, with Amazon rising 7.7% and Alphabet climbing 5.4%, while Tesla and SpaceX declined. Defence stocks also fell as Trump’s Pentagon spending request faced greater congressional scrutiny. The dollar was down 0.35% against major currencies in the latest update, while gold rose and oil fell. Analysts cautioned that presidential veto powers and congressional procedures could produce political gridlock rather than sweeping policy changes.