Call it a contrarian move. It has been a riveting 12 hours or so in the markets as investors slice and dice the midterm election outcomes.
Initially, stocks got hammered as the results trickled in. The thinking was that Democrats are less pro-business than Republicans, and since they will control the House and the Senate, there goes the corporate profit miracle that has driven the markets over the past two years.
But something very interesting has emerged after that initial knee-jerk reaction. Stocks are rallying on Wednesday — big-time!
Here are three reasons I think we're seeing this play out.
First, the midterm election results threaten to significantly disrupt AI data center expansion as voter backlash over soaring utility bills, grid instability, and water usage drive a sharp political pivot toward tighter regulatory oversight. That is being viewed as a positive for hyperscalers such as Alphabet (GOOG, GOOGL) and Amazon (AMZN) in that they will be forced to pull back on spending, which would boost free cash flow.
#initially
Initially, stocks got hammered as the results trickled in. The thinking was that Democrats are less pro-business than Republicans, and since they will control the House and the Senate, there goes the corporate profit miracle that has driven the markets over the past two years.
But something very interesting has emerged after that initial knee-jerk reaction. Stocks are rallying on Wednesday — big-time!
Here are three reasons I think we're seeing this play out.
First, the midterm election results threaten to significantly disrupt AI data center expansion as voter backlash over soaring utility bills, grid instability, and water usage drive a sharp political pivot toward tighter regulatory oversight. That is being viewed as a positive for hyperscalers such as Alphabet (GOOG, GOOGL) and Amazon (AMZN) in that they will be forced to pull back on spending, which would boost free cash flow.
#initially
2 days ago
