Tech giants rally after Democrats win House and Senate in 2026 midterms

Major technology stocks climbed on Wednesday after Democrats secured control of both chambers of Congress in the 2026 midterm elections. Amazon jumped 8%, Google rose more than 6%, Microsoft gained 4%, Meta added 3% and Apple, which recently received tariff refunds, advanced nearly 7%.

David Kelly, chief global strategist at JPMorgan Asset Management, said the outcome removed market uncertainty, noting that a divided government could bring "moderation in growth, moderation in inflation, less uncertainty, and I think that's all helping the stock market move up today."

In contrast, shares tied to Elon Musk and companies focused on AI data center construction declined. Voters rejected AI data center measures in 40 of 41 local ballots, and a CNBC poll found 56% considered data centers a key voting factor. Analysts warned that Democratic victories in gubernatorial races in Texas, Georgia and Ohio could lead to stricter regulation of new data center projects.

Macquarie analyst Paul Golding highlighted that state regulators oversee backup power emissions, zoning, water, interconnect/grid and tax issues, while Needham analyst Laura Martin wrote, "We believe higher regulatory barriers entrench incumbents, and increase risks (and raise required ROICs) for new entrants. Hyperscalers are AI incumbents."

Tesla fell 2% and SpaceX slipped 3%, and Nvidia edged down just over 1%. Smaller AI cloud providers, known as neoclouds, were hit harder; CoreWeave dropped 10% and Baird analysts described a "sentiment headwind" for the sector.

Golding remained bullish on AI infrastructure, suggesting well-capitalized operators would benefit if projects slow in some states. Axe Compute CEO Chris Miglino said increased regulation might prompt investors to favor providers with secured power and financing, noting that companies with established infrastructure are in a stronger position than those still developing capabilities.