The American Democratic Party succeeded in transforming economic pressures and the high cost of living into a comprehensive focus of its electoral campaign, overcoming some of its internal differences between the moderate movement and the progressive wing, in a strategy that helped it achieve a broad victory in the midterm elections, and seize control of both chambers of Congress and a large number of state governorship positions.
According to an analysis published by the Wall Street Journal, the most prominent factor behind this shift was the ability of the Democratic candidates to unify their rhetoric around the ability to afford the cost of living, while holding President Donald Trump’s policies responsible for the pressures facing American families, instead of being drawn into the cultural and social issues that weakened the party in previous electoral elections.
The results of a voter poll conducted by the Associated Press and American television networks reveal that 89 percent of participants considered the cost of living a major or important factor in determining their electoral choices, with high fuel and food prices topping the list of concerns.
The success of the economic message was not limited to candidates affiliated with the progressive movement, but was also adopted by moderates, even if the two parties’ proposals to address the crisis differed. Thus, the party was able to present a joint electoral discourse despite the continuing differences regarding its political and economic orientations.
An electoral alliance that transcends divisions
Factors that helped Democrats expand their support base include selecting candidates with a local presence and the ability to attract independent voters. Especially in states that have been dominated by Republicans for decades.
According to the newspaper, the party relied on figures from diverse professional and social backgrounds, including doctors, nurses, clergy, farmers, union leaders, teachers, and former military personnel, in an attempt to regain the confidence of segments of the working class that had distanced themselves from the Democrats in previous elections.
Electoral groups that had supported Trump in the 2024 elections also returned to the polls in favor of the Democrats, including young people and Latino voters, in a shift that reflected the fragility of the electoral alliance that helped the American president return to the White House.
This shift extended to states with a solid Republican orientation, as Democrats achieved gains in Texas, Kansas, and South Carolina, benefiting from the focus on living burdens, objection to trade policies, and the repercussions of the war on Iran, which raised the costs of fuel and fertilizers and burdened large sectors. Especially in rural areas.
In Texas, Democratic candidates James Talarico and Gina Hinojosa were able to achieve a remarkable political breakthrough, through a speech that focused on the ability to afford living costs, combating corruption, and limiting the influence of billionaires, in a state where Democrats have not achieved a victory in executive positions since 1994.
Hundreds of millions of dollars pumped by major investors in the technology sector in the United States did not succeed in saving Republican candidates from widespread electoral losses, after the Democrats achieved major victories in the midterm congressional elections, in a result that revealed the limits of Silicon Valley’s financial influence in the face of shifts in the American electoral mood.
According to a report published by the Financial Times, billionaires from the technology sector spent more than $600 million to support Republican candidates, in one of the most expensive election campaigns in the history of the United States, but this money did not succeed in tipping the balance in favor of their candidates, with mounting popular fears about the expansion of the use of artificial intelligence and the influence of major technology companies.
Elon Musk, CEO of Tesla and SpaceX, was the most prominent financier, as he spent more than $470 million on election races for the Senate and House of Representatives. About half of this amount went to support Republican candidate Ken Paxton in Texas, who lost to Democrat James Tallarico.
The losses were not limited to Texas, as other Republican candidates lost in Senate races in swing states, along with a number of the party’s candidates for the House of Representatives, despite the significant financial support they received from billionaires and technology companies.
The newspaper quoted a political official who participated in coordinating technology sector spending during the months before the elections as saying that “the money did not work,” noting that Musk spent about half a billion dollars and lost all the races in which he entered.
Artificial intelligence is at the heart of the battle
Money was not the only focus of the electoral confrontation; Concerns about the expansion of data centers and the infrastructure needed to run artificial intelligence applications have become an issue influencing voters’ choices.
A post-voting poll of voters conducted by NBC showed that the majority of participants considered artificial intelligence data centers an important or major factor in determining their electoral choices.
Democratic candidates opposed to the expansion of data centers also achieved remarkable victories, benefiting from growing objections to these facilities’ consumption of energy and resources, and their impact on local communities.
According to the Financial Times, these fears coincided with voter dissatisfaction with high inflation and the repercussions of the war on Iran, which contributed to the widening of the electoral shift in favor of the Democrats, and weakened the ability of political spending for the technology sector to influence the results.
The spending extended to a number of the most prominent investors and companies in the sector. Venture capital investors Marc Andreessen and Ben Horowitz poured more than $90 million into the election, while the founders of the Gemini cryptocurrency platform, Cameron and Tyler Winklevoss, spent more than $5 million.
Greg Brockman, co-founder of OpenAI, and his wife, Anna, also made donations worth $25 million to MAGA Inc. and the Leading the Future political committee, which supports the expansion of artificial intelligence.
In another race, the Verchick Committee, which is supported by the cryptocurrency sector, spent more than $50 million on ads targeting Democratic candidate Sherrod Brown, one of the sector’s most prominent critics, in an attempt to prevent his return to the Senate, but it did not succeed in achieving its goal.
Regulatory pressures loom
The repercussions of the results do not stop with the loss of candidates supported by the technology sector, as companies face the possibility of increased regulatory pressure with the transfer of control to Democrats in Congress.
The newspaper indicated that dozens of initiatives aimed at freezing the establishment of data centers were approved in various regions of the United States, coinciding with the escalation of popular objections to the expansion of these facilities.
Democratic leaders have also begun calling for using the new majority in Congress to summon artificial intelligence company officials to testify under oath over the next year, in a move that could open a new front between lawmakers and major technology companies.
However, the amount of money injected by these billionaires remains limited compared to their personal wealth. The newspaper explains that Musk's spending is equivalent, relative to his wealth, to a donation of only about $400 by a person with a million dollars.
After the scale of the Democratic victory became clear, Musk deleted a post on the “X” platform in which he had called on voters to vote for Republicans, in a symbolic reference to the failure of Silicon Valley’s electoral bet.
The performance of global markets varied in the wake of the results of the US midterm elections, in which the Democrats achieved wide victories, which raised hopes for reaching a settlement that would end the US-Israeli war on Iran, and caused a wave of decline in oil prices and shares of technology companies and data centers, compared to the rise of stocks in general, bonds and renewable energy shares.
Brent crude futures fell by about 9 percent during overnight trading, falling below the level of $100 per barrel. Crude oil has lost about 20 percent since the beginning of the week, and if this decline continues until Friday’s close, it will be the largest on a weekly basis since one of the weeks of April 2020, when US crude prices briefly fell to negative territory.
The sharp decline in energy prices encouraged a rally in bond markets, which led to a decline in yields. It also pushed the dollar to its lowest level in a month against the euro, which reached $1.1273, and contributed to supporting stock markets.
The main stock indices rose against the backdrop of the clarity of the election results, as the Standard & Poor's 500 index closed up by 1.6 percent, while European stocks recorded their highest levels in two months.
Pressure on the technology sector
On the other hand, shares of companies operating in solar energy supply chains jumped, amid expectations that Democrats will strengthen support for renewable energy sources, while shares of data center companies and suppliers of related equipment declined across Asia, due to expectations of tightening regulatory restrictions on the sector.
The South Korean KOSPI index, which includes a large weight for chip manufacturing companies, fell by 4 percent, approaching its lowest level in 7 months during morning trading. The benchmark index in Taiwan also fell by 1.8 percent, while shares of technology equipment suppliers pressured the Japanese Nikkei index, which fell by 0.5 percent.
These pressures came after Democratic candidates who opposed the expansion of the construction of data centers, and ran their election campaigns partly on the basis of demanding a freeze on their construction, achieved remarkable victories in the states of Texas and Georgia, in an indication of shifting popular attitudes towards artificial intelligence.
However, most analysts do not expect these developments to lead to a decline in demand for artificial intelligence, data centers, or computer chips in the long term, but rather a temporary slowdown in the pace of growth.
Chris Weston, head of research at brokerage Pepperstone in Melbourne, said the scale of the Democratic victory was what surprised markets.
War drives oil bets
In energy markets, Brent crude tested the level of $93.50 per barrel during morning trading in Asia, approaching its lowest levels recorded overnight, with traders suggesting that US President Donald Trump, facing a Democratic-controlled Congress and under pressure from rising energy prices resulting from the conflict in the Middle East, will become less inclined to escalate the war with Iran.
Trump acknowledged on Wednesday that the war contributed to the defeat of the Republicans, while his vice president, J.D. Vance, was more frank, as he wrote on the “X” platform: “The reason behind our loss is the war.”
Reaching a settlement to the dispute would push oil prices further down, relieving inflationary pressures and reducing the possibility of resorting to additional increases in interest rates.
In the US bond market, the yield on 10-year Treasury bonds fell by 6 basis points overnight, and by an additional basis point in early trading in Tokyo, to 4.87 percent. The two-year bond yield, which is most closely linked to short-term interest rate expectations, also fell by about two basis points to 4.56 percent.
