MILAN – The blue avalanche, which gives the US Democrats control of the House and Senate in the US, produces all the necessary effects on global markets: further pressure on technology and AI stocks, which will encounter new obstacles and higher costs in the expansion of data centers on US soil; falling Treasury bond yields as the Trump administration's deficit spending will be limited by Democratic opposition; a related weakening of the dollar compared to other currencies; and a hoped-for drop for oil, which however has so far remained stable at 104 dollars (96.5 dollars for European Brent). The hope, in this case, is that the political conditions will be created for a new and more effective truce with Iran, capable of restarting traffic blocked on the Strait of Hormuz, deflating fossil energy prices. Above all, strong volatility that changes prices, because operators do not yet see a clear direction with respect to the changes inherent in the vote.
Price lists open higher in Europe but further sales on AI are feared
European stock markets are opening cautiously higher, with fractional index recoveries in Paris, London, Milan and Frankfurt. Last night Wall Street, before knowing the results of the vote, had closed fractionally higher, more due to a technical rebound. But the Asian stock exchanges this morning gave a clearer signal: with the Japanese Nikkei down by around 1.5% (but had lost up to 4% previously), and the Kospi flat and the Taiex which in Taiwan includes the chip giants Tsmc and AMD – down by around 1% after a dip above 3.50% in the red. As the operator Swissquote reported, the indices most exposed to the technology sector "fall due to fears of greater control over the development of AI, given its implications for employment and the environment".
What can change for Big Techs that invest in AI
Over the past two years, the White House has strongly supported the expansion of artificial intelligence, both to hinge it on the rediscovery of local industrial production, according to the slogan "Make America Great Again", and to win the technological race against China. But Trump, supported from the first hour by all the oligarchs of the American Magnificent Seven, also obtained funding and personal wealth from this exchange with Silicon Valley. “In the last two years of the presidential term it will be more difficult to advance his legislative agenda, while support for the AI boom will likely come under greater scrutiny,” continues Swissquote. The derivatives of the US indices, for now, indicate a downward start, with the technological Nasdaq leading the losses: even if investors' liquidity could change object, favoring a rotation towards other segments of the market, which has already been underway for weeks.
The concern of many is that the various SpaceX, Anthropic, OpenAi, Nvidia are unable to keep up with the now stellar multiples, achieved in years of sensational increases in prices and easy money entrusted to their manager-owners, struggling with the creation of the new world dominated by AI. And they committed to investing an astronomical sum that UBS calculated at 3,500 billion dollars, largely through debt. A debt that will now inevitably prove more expensive and difficult to place on the markets. "Investors could now expect greater caution on the development of data centers, especially in relation to energy consumption, authorizations, water use and impacts on local communities – observe Tcw managers -. Even if the AI cycle remained intact, fears of longer authorization times or slower implementation could weigh on the sentiment and multiples of the entire ecosystem".
The dollar and the yield of US Treasuries are falling
"The currency market is outlining what could be a long-term dollar decline scenario compared to the other three main currencies, which are all currently recovering in exchange with the greenback", observes David Pascucci, market analyst at Xtb. Even if currency volatility is not very high, the dollar is clearly sold against the Japanese yen, which has moved close to 157.40, below the support area of 158, while the euro has recovered to 1.12, and the pound has revised to 1.345 against the dollar.
