US STOCKS-Wall St set for higher open as Democrats win Congress; data center stocks slide

US stocks were ‌set ​for a higher open on Wednesday after Democrats secured sweeping victories in the midterm elections, with investors betting a divided Washington could limit the scope for sharp policy shifts. Democrats seized control of both the Senate and House of Representatives, scoring stunning ‌wins in Republican strongholds for the first time in generations in a broad voter backlash against President Donald Trump.

The prospect of fewer sweeping legislative changes under a divided government in Washington lifted large technology stocks, though concerns over tighter AI regulation weighed on shares of data-center operators. "Investors could conclude that Washington remains structurally constrained, limiting the prospects for dramatic shifts ‌in the economic outlook," said Michael Krautzberger, CIO for public markets, and Liam Wash, senior US economist, at Allianz Global Investors.

Among hyperscalers, Amazon.com jumped 3.7%, while Meta ‌Platforms, and Alphabet were slightly higher. At 8:31 a.m. ET, Dow E-minis were up 904 points, or 1.74%, and S&P 500 E-minis were up 66 points, or 0.87%. Nasdaq 100 E-minis were up 64.5 points, or 0.23%. The dollar weakened against most currencies and yields on long-dated Treasuries moved lower.

Trump acknowledged that the US-Israeli war on Iran played a role in his party's defeat in the elections. Elon Musk-led ⁠SpaceX and Tesla ​were among the laggards, down 6.5% and ⁠4.7%, respectively. Musk had spent nearly half a billion dollars backing Republican candidates, including efforts to keep Republicans in control in Texas, the home state of both companies.

AI TRADE IN FOCUS The AI trade will ⁠be in focus after Democrats made gains in key data-center states including Texas and Georgia, where public opposition to the industry's rapid expansion has been growing.

"Democratic wins at the state ​and local level are likely to lead to short-term data center moratoria, potentially affecting about 45% of planned US data center capacity expansion," Goldman Sachs economists ⁠said in a note. The AI trade has come under some pressure recently as investors grow wary of Big Tech's soaring AI spending and little evidence of adequate returns. The tech-heavy Nasdaq-100 index confirmed a technical ⁠correction ​on Monday.

Shares of data center operators IREN, Hut 8 , Applied Digital and Core Scientific fell between 5.2% and 10%. Chip stocks were modestly lower despite AMD forecasting faster-than-expected 2027 growth as its data-center sales surge. Shares of the chipmaker were flat after surging in premarket trading.

Nvidia was down 1.2%, while Marvell Technology , Intel and ⁠Micron Technology all moved lower. Defense stocks Northrop Grumman, RTX and Lockheed Martin fell sharply, as Trump's $1.5 trillion budget request could now face a tougher road in Congress.

Solar and ⁠clean energy related companies moved higher, as ⁠a Democratic sweep could reinforce expectations of federal support for clean-energy development to remain in place. The Invesco Solar ETF climbed 6.4% McDonald's gained 2.1% after the fast-food chain beat quarterly profit estimates, while Block jumped 9.7% after the payments company raised its full-year ‌gross profit outlook.