Wall Street rallies after Democrats win Congress, but data centre shares fall
Oil prices fell and Microsoft gained 6.7%, while data centre operator Hut 8 lost 23% as investors weighed the risk of tighter US rules on AI expansion.
- Wall Street experienced a broad rally, with the Dow Jones climbing 3%, after Democrats won control of both chambers of Congress, a result that investors felt reduced market uncertainty.
- In contrast to the wider market, shares of data centre operators and their suppliers sold off sharply.
- The fall in data centre stocks was driven by investor concerns that a Democrat-controlled Congress could introduce tighter regulations, slowing the expansion of artificial intelligence (AI) infrastructure.
- While data centre operators fell, large tech companies like Microsoft and Amazon saw their shares rise on the possibility that a slowdown in data centre construction would reduce their spending.
The Dow Jones Industrial Average led a Wall Street rally on Wednesday, November 4, 2026, climbing 3% after Democrats won control of both chambers of the US Congress. The result gave investors more confidence to buy shares, but data centre operators sold off sharply on concerns that tighter rules could slow the expansion of artificial intelligence (AI) infrastructure.
The Dow added 1,569.40 points to close at 53,356.12. The S&P 500 gained 119.70 points, or 1.6%, to 7,688.62, while the Nasdaq Composite rose 364.50 points, or 1.4%, to 25,736.51.
Democrats won the Senate and the House of Representatives in the November 3 midterms as voters turned against President Donald Trump. The party won races in Republican strongholds where it had gone generations without a victory.
“Stocks are sharply higher today as election clarity reduces uncertainty,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis. Sandven said the prospect of political gridlock often favours shares and helped explain Wednesday’s gains.
Microsoft and Amazon rise as data centre operators sell off
Microsoft rose 6.7% and Amazon.com gained 6.1%, while Alphabet advanced 3.2% and Meta Platforms added 1.4%. Investors saw a potential advantage for cash-rich technology companies if a slower pace of data centre construction reduced the sums they needed to spend.
For smaller operators and suppliers, the same slowdown could put pressure on their finances. Hut 8 fell 23%, IREN lost 11%, Core Scientific dropped 10% and Applied Digital slid 6.7%. Democrats made gains in Texas and Georgia, two important data centre markets where public opposition to rapid construction has been growing.
Scott Chronert, head of US equity strategy at Citi Research, said delays to data centre projects would have consequences beyond the operators themselves. Changing the pace of construction, he said, would “change the fundamental trajectory for many of those suppliers”.
The Philadelphia Semiconductor Index fell 3.1% to a six-month low. Advanced Micro Devices (AMD) bucked the decline, rising 1% after strong data centre sales helped it forecast faster growth in 2027 than investors had expected.
Concerns about how much the largest technology companies are spending on AI had weighed on shares before the election. The tech-heavy Nasdaq-100 entered a technical correction on Monday, November 2.
Oil falls on Iran war bets while solar shares gain
Oil prices fell sharply as traders bet the change in Congress could bring an earlier end to the Iran war. Cheaper oil helped the wider stock market, although the S&P 500 energy sector fell 4.8%. Consumer discretionary shares rose 4.3%, and all but two of the index’s sectors finished higher. The dollar weakened against most currencies, and yields on long-dated US Treasuries fell.
Defence contractors Northrop Grumman, RTX and Lockheed Martin lost ground as investors weighed the prospect of stronger congressional opposition to Trump’s US$1.5 trillion defence budget request.
Elon Musk’s SpaceX fell 3.9% and Tesla lost 3.3%. Musk spent nearly US$500 million backing Republican candidates, including efforts to keep the party in power in Texas, where both companies are based.
Solar and other clean energy shares rose as investors bet that Democratic control of Congress would help preserve federal support for new projects. The Invesco Solar ETF, an exchange-traded fund, gained nearly 6%.
