Clean Energy Shares Jump, AI Data Centre Stocks Slip as Markets Weigh Democratic Congress

Semafor reported that stock and bond markets gained on hopes for the US economy and the fiscal outlook. Bets that federal borrowing will slow supported Treasuries. A Morgan Stanley executive told CNBC that markets "like gridlock — they don't like a party with too much power," because control of Washington will now be divided. Reuters reported that US stock futures were rising as investors assessed the result. Earlier in Asian trading, Nasdaq futures had fallen sharply.

Data Centres Down, Renewables Up

In premarket trading, Reuters reported that Core Scientific fell 2.8 per cent and IREN 1.4 per cent, while Applied Digital and CoreWeave were marginally lower. Analysts quoted by the agency expect more congressional hearings and investigations into the AI build-out. They doubted that any legislation would meaningfully slow data centre construction.

Clean energy shares moved the other way. First Solar rose 9.4 per cent, Sunrun 10 per cent, Enphase Energy 7.6 per cent and NextEra Energy 2.2 per cent, according to Reuters. In Europe, Vestas gained 5 per cent, Ørsted 7 per cent and EDP Renewables 4.4 per cent. Paul Jackson of Invesco told Reuters that "the more that oil and gas prices rise, the bigger the incentive" to deploy clean energy.

Musk-linked stocks were among the biggest losers. Reuters reported that SpaceX fell 3.2 per cent and Tesla 3.6 per cent. Semafor noted that Musk spent heavily, and unsuccessfully, to defeat Democrats in Texas, where both companies are based. Kathleen Brooks of XTB told Reuters that the result "puts into doubt a potential merger between SpaceX and Tesla." Defence contractors also fell, Northrop Grumman by 5 per cent, because analysts expect a Democratic Congress to fund defence below earlier forecasts.

Dollar at One-Month Low

In currency markets, Reuters reported that the dollar index fell 0.6 per cent to 101.27, its lowest in a month. The euro rose 0.6 per cent to $1.1258 and the yen gained nearly 0.8 per cent to 157.92 per dollar. Sterling rose 0.3 per cent to $1.3458. The 10-year Treasury yield fell nearly 5 basis points to 4.915 per cent, and traders cut their bets on interest rate rises next year.

Moh Siong Sim, a currency strategist at OCBC, told Reuters: "The price action is consistent with concerns about greater scrutiny on AI in the event of a Democratic sweep." He added that federal AI legislation would still be hard to pass because President Trump holds a veto. Carol Kong of Commonwealth Bank of Australia said investors would turn back to economic fundamentals once the elections are over, and that escalation in the Middle East could push oil higher and support the dollar.

Why It Matters

Wednesday's trading shows how closely investors now link US politics to the economics of AI infrastructure. The first moves suggest markets expect oversight, hearings and local friction over power and land rather than a sudden halt to data centre spending. The losses have also landed on stocks that were already weak. Gulf investors and sovereign funds have large stakes in US AI companies and data centre projects, and they will be watching whether that scrutiny becomes legislation or stays at the level of investigations.