Democrats’ strong performance in the midterm elections is reshaping expectations for businesses and investors, as President Trump faces a newly constrained lame-duck term. Votes were still being counted, but Democrats had taken control of both chambers of Congress and made gains in state-level races, including in reliably Republican Kansas, South Carolina and Texas.
The result has raised questions about the future of industries viewed as favored by the administration, particularly fossil fuels and artificial intelligence. Holger Schmieding, an economist at Berenberg, wrote to investors that the vote showed the political pendulum moving against Trump’s policies, with potential consequences for business decisions in those sectors.
Elon Musk’s political spending did not prevent Democrats from scoring major wins in Texas. The article reports that he spent about $224 million in the state. The outcome could complicate the state’s AI expansion, amid the possibility of a moratorium on terrestrial projects. Musk responded on social media by saying that “data centers in space” were looking appealing.
Elsewhere, markets rallied on the prospect of a divided government. In California, early results suggested that a billionaire tax ballot measure could be defeated after opponents spent heavily on the contest.
The election also prompted questions about whether voters’ concerns over the cost of living might factor into Federal Reserve policymakers’ deliberations on interest rates.
Sources: The New York Times Business.