US stock markets volatile after Democrats’ sweeping midterm victory

• Data center operators, chipmakers and defense stocks come under selling pressure
  
  

US stock markets remained volatile on Wednesday following Democrats’ sweeping gains in the Nov. 3 midterm elections, with some tech giants posting gains while oil stocks fell amid uncertainty over US foreign policy.

Democrats won more seats than Republicans in both chambers of Congress, unofficial results show, and analysts view the Republicans’ loss as a potential force leading to policy changes in artificial intelligence (AI), cryptocurrencies, energy, tariffs, and more.

With the newly elected members of Congress set to take office on Jan. 3, 2027, potential policy changes after the Democratic takeover drove up the stock prices of some firms while driving down others on Wednesday.

Investors expect that the Democrats’ campaign pledges on regulating AI development and slowing down data center construction will help tech giants curb billions of dollars in investments and return to positive free cash flow.

Tech giant Apple’s stocks hit an all-time high and closed up 5.3% following the unofficial results of the midterms, while Microsoft gained nearly 7%, Amazon rose over 6%, Alphabet climbed more than 3%, and Meta’s stock increased 1.5%.

Tech giants boosted their combined market value by $1 trillion in a single day.

At the same time, chipmakers dependent on AI infrastructure revenues suffered, with Nvidia stocks falling 3.2%, dropping to the world’s second most valuable company. Micron’s stock plunged 7%, Intel lost 3.8%, and Broadcom stocks shed 2%.

Data center operators suffered even steeper losses with Hut 8’s share price dropping by a whopping 23%, IREN stocks plummeting over 11%, Core Scientific falling more than 10%, and Applied Digital losing nearly 7%.

These losses were driven by Democratic wins in states like Texas and Georgia, where public backlash against data centers is on the rise.

Trillionaire Elon Musk’s firms came under intense selling pressure after he paid nearly $500 million to support Republican candidates, especially in Texas, but the historically red state flipped to blue in midterms and led SpaceX shares to drop nearly 4% and Tesla’s stock to fall 3.3%.

Meanwhile, January-delivery Brent crude futures declined 9% on Wednesday amid expectations that a Democratic Congress will pressure the Trump administration to end the war with Iran, driving down the shares of Exxon Mobil by 4.6% and Chevron by 3.7%.

Solar firms enjoyed new gains with expectations for stricter oil regulations and increased clean energy support, as First Solar, Sunrun, Enphase Energy, and Canadian Solar shares grew by 1-7%, wind firms Orsted and Vestas rose 4-6%, hydrogen firm Plug Power’s shares gained 3.5%, and battery firm Fluence Energy’s stock price soared more than 10%.

Defense stocks came under pressure as the new Congress is expected to turn down US President Donald Trump’s $1.5 trillion defense budget and potentially ease Middle East tensions more significantly.

Lockheed Martin shares fell 7%, Northrop Grumman shed 4.5%, and RTX shares declined 2.6%.