The Texas win for the Democrats spells trouble for datacentres, analysts say.

's loss of the Texas governorship means that the construction of more data centres is now open to question. We saw this overnight with weakness in the AI stocks like and , and while there has been some recovery the questions about how this plays out will continue to dog a sector already grappling with spending worries. Now legislation concerns are on the list too.

, chief market strategist at the investing platform Moomoo ANZ in Sydney, told Reuters earlier:

I think the fear is that the pace of the AI infrastructure rollout could slow, potentially quite markedly in Texas, as they start to digest exactly what mandate they might have in terms of AI.

Going into this, we were talking about the importance of the Texas and Georgia governor races. Those two states effectively make up about a third of all AI data centre spend and projects. If both of those go Democrat at the governor level [they did], the potential for it to slow is very much there, and that would obviously cascade through to the rest of the AI sector.

e, chief US economist at Natixis in New York, says:

Economically, we still don't think the direct implications are huge.

That doesn't mean that [last night] won't have big implications. For one thing, doesn't like bad news and seeing as how he personally selected many of the struggling candidates, he might be looking to change the narrative sooner rather than later.

A 'short and intense' campaign in Iran has been rumoured ... and that would certainly be a distraction.

Presidents typically start making changes after midterms anyway and Trump could be looking for scapegoats. Secretary of Defense comes to mind as a possibility. Bessent is another one to watch...he may be looking for a graceful exit if he views the administration as a sinking ship.

, chief investment officer of global liquidity markets at Federated Hermes, says:

Democrats pulled off a double victory in the US midterm elections that few saw coming at the onset of the year. The blue wave means the federal government is sure to be divided on most issues. That typically creates a blockade against new legislation — an environment which broad financial markets traditionally view favorably as variables decrease.

But liquidity investors are different: they primarily look to the US Federal Reserve headquarters further down the National Mall from the Capitol for guidance – and its perspective is unlikely to have changed. The Fed might have wanted to hike rates in October due to stubbornly high inflation, but that policy-setting meeting may have been too close to the election. (Market sentiment has it that Fed officials traditionally have avoided rate moves in those periods to avoid seeming biased to a political party.) That stance, and officials penciling one more increase in 2026 in their September Summary of Economic Projections, could mean a quarter-point hike in December. That would raise the fed funds target range to 4.00-4.25%.

That scenario would be music to the ears of cash investors, as the yields of most liquidity products have the potential to rise in concert with Fed hikes. And additional tightening in 2027 is likely. Why? Due to the lag between policy moves and their impact on the broad economy, inflation might not decline for several quarters. Also, the Fed tends to adjust policy in cycles rather than intermittently. But even if rates stay at present levels, industry liquidity offerings should, we believe, remain attractive.

The Democrats have taken control of Congress in the 2026 midterm elections. What does this mean for investors?

, chief investment officer for global equities at Federated Hermes, says:

Prior to the US midterm elections, we felt that only two outcomes could meaningfully change monetary and fiscal policy: a GOP sweep creating wider voting margins or a Democratic blue wave large enough to produce filibuster- and veto-proof majorities. While the Democrats have retaken both chambers of Congress, it appears not to be enough to create the latter scenario.

In the coming weeks, the stock market may experience volatility, but we think it should ultimately rise. Historically, the 12 months following midterm elections have been good for US equities. In fact, it has been 88 years since the S&P 500 last posted a negative return in that period, with an average of 14%. Why? One explanation is that the poor result of the president's party motivates it to champion economic policies that improve its chance of victory in the next presidential election. Another is that a divided government hinders the sort of drastic legislation that can unsettle investors, though this election outcome actually raises the odds of modestly stimulative policy passing.

While the present uncertainty and changing of the guard might make investors anxious, no US midterm election has ended the world, and this one will not either. We are looking past the noise, focusing on the real opportunities due to strong economic growth, significant infrastructure buildout and what may be the earnings cycle of our lifetime.

Overnight markets had pointed towards steep losses for futures, but the picture is looking rosier as markets seem to look towards the future with relish.

A divided US government has often been the best outcome for markets, and we are staring that squarely in the face today. Gold and silver are up, while volatility has reversed course too. All eyes are on the White House now, but Trump's apparent acceptance of the results at least suggests a nasty litigation battle (or worse) is off the cards.

Midterms rattle Trump, send dollar lower and bullion higher: The heavy Republican defeat is a stark reminder that even a president who dominates the political conversation is not immune to voter discontent.

The scale of the losses will inevitably raise questions about Trump's ability to push through his agenda over the next two years, and markets are already reacting. The dollar is under pressure as investors reassess the political outlook, while gold and silver are benefiting as safe haven plays.

A divided government may ultimately prove manageable for markets, but the immediate message is clear: investors are becoming less comfortable with the political risks surrounding the White House.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The dollar has hit a one-month low, US stock futures are down and gold rose after the Democrats won control of Congress, increasing expectations of tougher regulation of the AI sector.

US Treasuries rallied as fears around the fiscal outlook eased and investors sought the safety of bonds with the dollar falling.

Democrats regained control of the Senate and also triumphed in the House of Representatives, routing Republicans nationwide with historic victories that will give them powerful new leverage over for the remainder of his presidency.

You can follow the latest on our midterm election blog here:

The dollar fell 0.6% against a basket of major currencies at one stage, and is now down 0.35%. Its decline was most pronounced against the Japanese yen and the Swiss franc, both seen as safe-haven currencies.

Gold prices ​rose 2.4%, supported by the weaker US dollar. Spot gold climbed to $4,022 an ounce.

US stock futures fell sharply, with tech-heavy Nasdaq futures losing more than 2% before paring those losses to 0.25%. S&P 500 futures are down 0.2%.

In bond markets, the two-year Treasury yield fell 3.5 basis points overnight and is now down 1.6bps at 4.598%, while the 10-year yield is 2bps lower at 4.929%. Yields move in opposite direction to prices.

, head of global macro at Deutsche Bank, explains:

There's been a rally for US Treasuries as well, given that divided government has generally made it harder for fiscal stimulus to be passed. So that's eased concerns on the fiscal trajectory a bit.

Investors are also pricing in a more dovish path for the Federal Reserve too, with the amount of rate hikes priced by the June 2027 meeting down 3.3bps this morning to 55bps. So that's pushed the dollar index down.

In Asia, Japan's Nikkei lost 1.4% while Hong Kong's Hang Seng rose 1.3% and South Korea's Kospi gained 0.4%.

, chief North America economist at Capital Economics, says:

The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook, given the party still lacks a filibuster-proof majority in the Senate and President Trump has veto power to block legislation.

But the Democrats will now hold Senate seats in many typically red states for the next six years, which increases their chance of being able to enact more sweeping legislative changes if they win the next presidential election. That includes the potential for tax hikes on corporations and high-income individuals as well as regulation that could delay the AI rollout.

• 9am GMT: S&P Global Eurozone services and composite PMIs for October

• 9.30am GMT: UK services and composite PMIs for October

• 10am GMT: Eurozone inflation flash for October

• 1.15pm GMT: US ADP Employment change for October

• 1.30pm GMT: US Trade for September

• 3pm GMT: US ISM Services for October