Midterm Elections/Wall Street is keeping an eye on gubernatorial races in 36 states as the direction of the AI ​​craze continues

Americamidterm elections AI impacts investment prospects,wall Street Keep an eye on the gubernatorial races in 36 states to see whether voters are willing to allow major technology companies to continue building massive data centers. State and local governments controlling construction permits may have a more direct impact on this wave of AI craze than the number of seats in Congress.

This election is being seen as a referendum on Trump’s policies. Key survey predictions,democratic party It is expected to regain the House of Representatives, but the Senate outcome is uncertain. Some on Wall Street are preparing for a possible “blue wave” initiated by the Democratic Party.

But many fund managers believe that the biggest impact on the market could be the governor election. Most opposition to data center construction comes from the state and local level; Candidates have also sensed public dissatisfaction and made it a campaign issue.

Joseph Ziddle, chief market strategist at wealth management company Cresset, said: “Every midterm election is important, but this time it feels especially important for a number of reasons, including that many local elections are similar to allowing voters to vote on whether to build AI data centers.”

Gubernatorial elections are fierce in Ohio and Texas, two major data centers. If the Democratic Party wins in any one state, it could create skepticism in the market about the prospects for local data center construction.

Jim Bianco, president of Bianco Research, said: “The market is using the gubernatorial election, especially the Texas election, as an indicator to judge the AI ​​​​market. If Republican Texas Governor Abbott loses the election, it will be a big trouble for the current AI market.”

The election comes at a time of volatility for technology stocks. The Nasdaq 100 fell 10% on Monday from its all-time high in early October and entered correction territory as investors questioned whether the surge in AI spending that has propped up the stock market this year could be sustained.

As far as the federal level is concerned, some investors believe it is best for the market if both parties control both houses of Congress. Governments scrutinize each other, and it is more difficult to pass new spending and regulatory bills, which has historically been beneficial to risk assets.

Dennis Chisholm, head of quantitative market strategy at Fidelity Investments, said: “Historically, the market has been more inclined to see the White House and Congress controlled by different political parties.” He said that when government power is controlled by different political parties, it is more difficult to promote new bills and policies, and companies are more confident about existing regulations.

Even if Democrats win both houses of Congress, some investors still believe the stock market could get a boost as Trump has threatened to use his veto power and the bill could also be blocked. However, Zidel reminded that if Democrats completely control Congress, they could issue subpoenas more often and require companies to attend hearings, which would make companies more conservative when making decisions or taking risks.

Pennsylvania’s 7th District reflects the desire of some voters to check and balance the Republican Party. This indicator constituency in a key state has supported the winning candidate in every presidential election since 2008. It is also now a key battleground for the Democratic Party in its attempt to regain control of Congress.

Democratic nominee Bob Brooks, a retired firefighter and union leader, is challenging Republican incumbent Rep. Ryan McKenzie. McKenzie won in 2024 by only 4,062 votes. Polls show Brooks has a good chance of flipping the seat.