Democrats win the midterms... What it means for the market in the short and long run... The war in Iran and AI were on the ballot... Harwood, North Dakota bucked the trend... History suggests a wave of bullishness...
The 'blue wave' swelled from coast to coast last night...
Democrats will take control of both the House and the Senate in January.
They flipped at least seven Senate seats – Iowa, Kansas, Ohio, Maine, North Carolina, South Carolina, and Texas, with Alaska and Mississippi still undecided as we went to press – and held on to battleground seats in Georgia and Michigan. And some projections show the Democrats ending up with as many as 268 House seats once all votes are counted, well past the 218 needed for a majority.
The biggest representation of the "blue wave" was in Texas. State Rep. James Talarico beat Attorney General Ken Paxton to become the state's first Democratic senator since 1988. And Gina Hinojosa unseated Gov. Greg Abbott. These were the first Democratic statewide wins there since 1994.
While the results were becoming final, Politico's Dasha Burns placed a call to President Donald Trump on the outlet's live election show... and Trump's assistant picked up and put him on the phone.
Trump started by saying he'd already heard from Democratic leaders and wants to work with them...
I have the right to veto everything, but I don't want to be just sitting there for two years vetoing everything.
By the end of the same call, though, he was talking up his "powerful veto power" – "the ultimate power," as he put it – and said that if he doesn't like a bill, "We're just going to veto."
So, we'll see how work and life in Washington go starting in January.
The market voted bullish today...
After futures initially fell overnight, the Dow Jones Industrial Average finished today up 3%, its best day since April 2025. The U.S. benchmark S&P 500 Index was up 1.6%, and the Nasdaq Composite Index gained 1.4%.
The CBOE Volatility Index ("VIX") – considered by some to be the market's "fear gauge" – fell 19%. And stock buying was broad. More than 370 stocks in the S&P 500 were higher, and the small-cap Russell 2000 Index was up 1.6%.
Oil futures fell, too. Following the election results, the January contract for Brent crude is down about 8% in the past 24 hours to around $95 a barrel, and West Texas Intermediate's December contract is off about 8% to roughly $88.
The market is enjoying this short-term tailwind for a couple reasons. One is the usual reaction to an election being over, ending the uncertainty. Another is Wall Street's longtime affection for "gridlock" in government, where divided power makes big changes less likely.
Beyond that, we see the midterms meaning the most for the two big market stories of the year...
1. The war in Iran. Count the midterm results, at least in part, as a referendum on the war.
Vice President JD Vance today blamed the war for the Republicans' losses, and Trump later agreed. "I think it's largely true," Trump said. "Not the war, the price [of oil]." It's not hard to see why.
AAA reported the national average for a gallon of regular gas at $4.15 yesterday – the highest ever on a congressional Election Day, topping the $3.80 record set in November 2022. Diesel was a record $6.29 per gallon.
On February 28, the day the war began, the national average for regular gas was $2.98. Higher costs have hit consumers and businesses directly, and nobody is cheering it. The surge in prices certainly didn't help Republicans at the ballot boxes.
We're already hearing where war policy might go next as a result...
Trump told the Financial Times yesterday that the U.S. has no immediate plans to strike Iran – "we seem to be getting everything we want" – even as Gulf allies had reportedly been told to prepare for strikes after Election Day.
I'm not willing to believe anything with Iran is settled, though. We could still see an attempt from the White House to ramp up the conflict in the next two months, before the new Congress comes in.
2. Artificial intelligence. The election results could shift the pace of the AI data-center build-out... and, therefore, the overall AI boom/bubble.
AI data-center stocks started falling overnight as the Texas results came in, and they haven't stopped.
CoreWeave (CRWV) closed nearly 10% lower today. And SpaceX (SPCX) – which is building out multiple gigawatts of data-center capacity, including in Texas – fell about 4%.
Texas has up to 30% of the country's planned data-center gigawatts within its borders... And Hinojosa, the winner of the governor's race, campaigned on an immediate moratorium on new Texas data centers. She pledged to let new centers resume only after the state legislature passes protections that include safeguards for water supplies and electricity costs, as well as giving local communities a bigger say.
Abbott, once a big AI booster, had already paused new data-center grid connections in August. He lost anyway. Now the industry will wait until at least January and likely much later to see which projects move forward.
It wasn't just Texas.
Communities in 10 states voted on 41 data-center ballot measures yesterday, and nearly all of them went against the industry, according to the Data Centers on the Ballot tracker.
The lone win came in Harwood, North Dakota (just north of Fargo), where a data center is planned to open within a few months.
Now, some of these votes happened in areas that had no data centers planned anyway. Others matter, though. In Sunbury, Ohio, a measure to ban large data centers won 78.6% of the vote. This could disrupt a proposed $2 billion Amazon (AMZN) project.
The thing is, the market had largely seen this coming. As we've reported over the past month, it showed up in big tech stocks as they lined up more debt to fund AI, and in the bond prices of companies like CoreWeave. Last night confirmed it.
Now come the questions about what happens next in Washington.
One suggestion came from former Democratic Rep. Brad Carson of Oklahoma, president of Americans for Responsible Innovation. Carson wrote late last night that he expects the new Congress to take up mandatory safety testing for advanced AI models, whistleblower protections, product-liability rules, and tighter chip-export controls. He also predicts that the AI industry will have to sweeten its deal with communities on data centers.
Trump, he says, is the wild card.
Corporate demand is still there...
Nobody is saying demand for AI computing power went away overnight – or that it will.
Chipmaker Advanced Micro Devices (AMD) reported earnings yesterday, before polls closed. Its third-quarter revenue rose 45% to a record $13.4 billion. Its data-center segment grew 97% to $8.5 billion.
AMD CEO Lisa Su said she expects server revenue to double next year. Shares jumped 8% after hours, gave much of it back as the election results rolled in, and closed today up 1%.
The chips are still being sold. The question is who'll pay for infrastructure to power and use them, and how long it will all take to build. Maybe the build-out just takes longer than Wall Street had priced in.
For a company like AMD, sitting on orders, that's just a delay.
For a company that borrowed money to build a data center in a county whose people don't want it, that's a bigger problem. The same goes for related companies whose fortunes and near-term cash flow depend on those data centers getting built.
For long-term investors, it likely makes little difference – or not the difference you might expect...
Everything above is the knee-jerk reaction to a political outcome.
In politics, expectations are rarely met – except my longstanding one that everything in a fiat-currency world leads to more inflation.
On days like these, I'm reminded of what the late, great P.J. O'Rourke wrote for our former American Consequences publication. We've shared it in these pages before. From P.J...
Republicans and Democrats often take us to exactly where you'd expect they wouldn't...
For the past 150 years, the most broadly punishing financial panics, recessions, and depressions have begun while for-the-love-of-money Republican presidents were in power, rather than share-the-wealth Democrats...
He went on to note that for most of the 20th century, it was Democrats who sent the nation into combat – World War I, World War II, Korea, and Vietnam. Then, as he put it...
If there ever was a pattern... You think you know what party is what, then that party goes all whatchamajigger.
So, as such, we want to point you to what our colleague Whitney Tilson wrote in his free daily letter today...
In the aftermath of Election Day, I want to give a warning to my readers...
No matter how you feel about the results – whether euphoria or despair – don't let it affect your investment decision-making!
We know this message is often hard to digest the day after a big election, but in the long run, it's proven right.
Whitney pointed back to an e-mail he sent in September 2023. In it, he showed how a $1,000 investment in the S&P 500 would have done over the previous 70 years if you'd only owned stocks when a Republican was president... versus only when a Democrat was... versus staying invested the whole time, no matter who was in the White House.
Staying invested beat both approaches by more than $1 million. As Whitney added this morning...
I regularly hear from readers who tell me how terrible the economy is – and blame President Trump for it. I heard the same thing from Republicans when [Joe] Biden was president.
Here's the point: Don't buy or sell all your stocks today because of who won last night. Getting out of the market has historically been a bad move.
Now, if you're heavily exposed to certain AI companies, it might make sense to take some risk off the table in the near term.
The companies selling chips and equipment out of strong cash flows, like AMD, are doing fine. The ones that need both borrowed money and a local permit to build these capital-intensive digital factories... Well, their shares could be rocky for a while.
In the short term, history shows investors love when midterms are over...
Then there's the shorter-term opportunity the election itself may have just opened...
Since 1990, from Election Day in every midterm year, the S&P 500 and Nasdaq 100 Index have never been lower at both six and 12 months later. A year after the vote, the S&P 500 was up 14.5% on average... and the Nasdaq 100 was up an average of 37.3%.
It fits the four-year presidential cycle we've written about before: Year 2 (this year) tends to be the weakest or most volatile, before things improve in Year 3.
Our colleague and Ten Stock Trader editor Greg Diamond has studied all 32 midterm elections going back to 1902.
He found that stocks tend to get choppy heading into the vote... and then rally once the results are in. This happened after elections in 2006, 2010, 2014, 2018, and 2022 – no matter which party won. Today looks like more of the same.
That's no guarantee for this time around, of course. But it's a piece of evidence worth considering.
Greg, a former Wall Street trader who once made $4.6 million in a single day, uses recurring market cycles to spot trading opportunities, including what he calls "Doubling Windows."
His record includes 28 trades that returned 100% or more in 18 days or less – like 108% on AMD in seven days.
He believes the post-midterm rally has opened another window – one that could let readers double their money in as little as 18 days. But he also warns this could be one of the last big surges before a major correction in 2027.
Click here to see Greg's full presentation and how to get his next trade alert.
Meanwhile, here's a 'Congress doesn't matter' investment...
We'll end on an election-free thought... Our Stansberry Venture Technology editor Dave Lashmet has been following a story that's more or less insulated from politics. It involves a superhero, a soundtrack, and a camera.
The latest superhero blockbuster is now the highest-grossing film ever in North America, at about $950 million, and has topped $2.5 billion worldwide. Most people assume the studio behind the franchise is the big winner. But the film rights to this hero have belonged to a different company since the late 1990s.
By Dave's estimate, this one film should book about $750 million for the rights holder after production and marketing costs – before a single streaming dollar comes in.
That's just one piece of the business. The same company owns the music label behind the film's soundtrack... makes award-winning video games... and builds a critical piece of hardware for one of the biggest tech companies in the world.
Dave calls it a digital-content behemoth, and he believes shares could return 100% from here.
And the next catalyst for a move is coming tomorrow...
Last summer, we closed Dave's elite research service to the general public. The only way to access it has been through a $34,000 Stansberry Alliance membership.
But Dave's recommendation – which he sent to existing subscribers last week – is so timely that we've reopened access to Venture Technology to the public – at a special discount – but only until Friday.
New 52-week highs (as of 11/3/26): Alpha Architect 1-3 Month Box Fund (BOXX), Berkshire Hathaway (BRK-B), Exelixis (EXEL), Hagerty (HGTY), Public Storage (PSA), Veralto (VLTO), and VeriSign (VRSN).
Do you have feedback or a question for us? As always, send your notes to feedback@stansberryresearch.com. We read every e-mail. Just know we can't provide individual investment advice.
All the best,
Corey McLaughlin
Baltimore, Maryland
November 4, 2026
