Wall Street rallied Wednesday after major Democratic victories in the midterm elections, as investors assessed the consequences of possible restrictions on data center development. Texas, which accounts for about 25% of data center construction, and Ohio elected governors who support such restrictions, while voters also approved local measures limiting projects. The incumbent technology giants advanced, with Amazon gaining 7%, Microsoft more than 6% and Alphabet nearly 4%, as moderating capital spending could improve their cash flows. By contrast, the specialized neocloud providers declined, with CoreWeave losing almost 10%, Iren 11% and Nebius 6.5%, while their suppliers also faced lower order expectations. Semiconductor stocks were pressured as well, but underlying demand and existing backlogs suggest that projects should ultimately continue, even if the pace and structure of the buildout change.
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