NEW YORK: US stocks climbed broadly on Wednesday as Democrats’ sweeping midterm election victory eased political uncertainty and boosted risk appetite, though data center shares slipped on fears of tighter AI regulation.
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.
“At the margin, the (government) stalemate is positive for the fiscal picture,” said Roger Aliaga-Diaz, global head of portfolio construction at Vanguard.
The prospect of fewer sweeping legislative changes lifted some large technology stocks, but companies tied to the AI infrastructure buildout fell.
The AI trade was split, as investors favored cash-rich hyperscalers and shares of data center operators fell, 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.
Among hyperscalers, Amazon.com jumped 6.2 percent, while Meta Platforms added 1.6 percent and Alphabet gained 3.8 percent.
Shares of data center operators IREN and Hut 8 dropped 14 percent and 22.7 percent, respectively, while Applied Digital and Core Scientific also traded lower.
Chip stocks were sharply lower despite AMD forecasting faster-than-expected 2027 growth as its data-center sales surged.
The Philadelphia SE Semiconductor index fell 3.6 percent to a six-month low.
The AI trade has come under some pressure recently as investors grow concerned over Big Tech’s soaring AI spending and its returns. The tech-heavy Nasdaq-100 index confirmed a technical correction on Monday.
At 11:36 a.m. ET, the Dow Jones Industrial Average rose 1,261.73 points, or 2.44 percent, to 53,048.45, the S&P 500 gained 103.91 points, or 1.37 percent, to 7,672.83 and the Nasdaq Composite gained 364.49 points, or 1.44 percent, to 25,736.22.