The results of the congressional elections in the USA continue to dominate the stock markets. After the German leading index started the day stronger with an increase of around half a percent, the DAX rose to a two-month high over the course of the day.
Although a victory for the Democrats in the House of Representatives was expected on the stock market, the forecasts for the Senate were not so clear. Now the Democrats have regained the majority in both chambers of Parliament, which has caused a big surprise in the markets.
Is the political uncertainty easing?
The past two years of Donald Trump's policies have not been moderated further by Congress - with many surprises, says Carsten Mumm, chief economist at the private bank Donner & Reuschel. There could be more predictability. "And it's a big exclamation mark that American democracy works and that American institutions work," Mumm told the ARD finance editorial team.
Analysts see a chance that political uncertainty in the USA will now ease somewhat. This could have a positive impact on the companies' prospects. However, this is not certain when it comes to customs policy.
Economic and customs policy is likely to remain the same
With an uncomfortable majority at home, Trump can concentrate more on foreign policy, believes Thomas Gitzel, chief economist at VP Bank. The President will rely even more on regulations in the future. “Tariffs and trade conflicts could become more prominent again,” says Gitzel.
The German Economic Institute (IW) also recommends that German companies prepare for the same direction in economic and customs policy at least until January 2029. Customs policy will continue to slow down the German economy, says IW director Michael Hüther. “Trump is not imposing the tariffs by law, but by decree bypassing Congress.”
Even with the majority of Democrats in the Senate and House of Representatives, a Trump veto would have to be overruled by two-thirds of the voting representatives in both chambers - that is extremely difficult to achieve. In the USA, a political standstill is emerging, which Wall Street calls “gridlock”.
AI stocks under pressure
With decreasing scope for the Republicans in the budget, Landesbank LBBW expects a weaker dollar and falling yields on US government bonds. The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, also expects that it will be more difficult for Trump to restructure institutions, as he tried to do with the Federal Reserve (Fed).
However, the results of the midterm elections were not well received everywhere. AI stocks in particular came under pressure on the financial markets, such as chip manufacturers Samsung, SK Hynix and TSMC. As a result, the Japanese Nikkei temporarily lost more than four percent. The index was subsequently able to curb these losses somewhat.
The Democrats' victory in both chambers also sends a signal towards AI hype on the stock markets. Investors are now preparing for stricter regulation of artificial intelligence (AI) and reduced spending on AI infrastructure.
Resistance to data centers
During the election campaign, more and more resistance emerged against data centers - especially because residents fear rising energy and water prices. Even Republican politicians imposed moratoriums on the construction of new plants. With Democrat James Talarico's victory in Texas, which has traditionally been a Republican stronghold, tech companies could face a tougher course.
Trump also campaigned heavily in the southern state - and tech billionaire Elon Musk, who had spent around $366 million in the election campaign by mid-October.
With a view to the US economy, Trump's options for stimulating the US economy are likely to be limited in the future, according to Holger Schmieding, chief economist at Berenberg Bank. “The USA will therefore contribute less to global economic growth than before,” said Schmieding. The export-dependent German economy is also likely to be affected.
Oil prices remain stable - inflation in the euro area is rising
There was initially no major reaction to the US midterm elections on the oil market. The price for a barrel of North Sea Brent oil remained just over $103. With that, he barely moved. Instead, the war in the Middle East is coming back into focus and the question of whether Trump could toughen his course towards Iran.
