Midterms aftermath

The midterms just repriced three things investors care about: data centers, Iran, and the policy path for the next two years.

Democrats are projected to take both the House and the Senate. Three implications:

1. Data centers: regulation risk just got real.

Democratic governors won in Texas, Georgia, Michigan, Pennsylvania and Arizona. Texas alone holds about 27% of planned U.S. data center capacity, and these five states together hold roughly 39%. Several of these candidates campaigned on moratoria or stricter rules tied to power, water and tax incentives. Legislatures will decide what actually passes, but the era of frictionless approvals looks over. Expect more scrutiny of grid costs, incentives and siting, and a higher cost of capital for projects in the most exposed states.

2. Iran: oversight arrives, but a veto still stands.

The House already passed war powers resolutions three times, and the Senate had been the blocker. With both chambers flipping, a resolution can now reach the President's desk. A veto is still likely, and an override needs two-thirds. The real leverage is the power of the purse: hearings, funding conditions and public pressure. For markets, the key variable is oil and the Strait of Hormuz, not the vote count.

3. The economy: gridlock is the base case.

Divided government means fewer big fiscal or regulatory swings and more standoffs on appropriations, tariffs and energy policy. Markets tend to like predictability, but the AI power buildout now faces a political layer it didn't have last week.

The bottom line: this is less about left versus right and more about who controls the pace of the AI infrastructure boom. Equity markets swing down in the early hours after the results, and are now pointing to a higher opening. Bonds are being bid, and gold, Silver and Bitcoin are up.

Want to know more? You can register for free at Fund@mental.

#iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation