US midterms: a big blue wave

Democratic control of Congress will increase policy friction in Washington while leaving President Trump significant scope to act through executive powers.

• Democrats are projected to win the House, secure roughly 56 of the 100 Senate seats and capture several governorships, with moderates gaining influence within the party.
• The projected Senate majority remains below the 67 votes needed to override a presidential veto, limiting the prospects for a broad Democratic legislative programme.
• Fiscal risks tilt toward a wider deficit as healthcare and defence spending rise, while the next government shutdown deadline is 11 December and the debt ceiling is expected to bind in mid-to-late 2027.
• Trade is the clearest policy risk because the president can use existing unilateral authorities, leaving tariffs a source of volatility for import-sensitive sectors, multinational supply chains and US trading partners.
• Nine of the ten states with the largest committed data-centre demand for 2027 are projected to have Democratic governors, and proposed construction pauses or taxes could delay new capacity while increasing the value of installed compute.

Takeaway: Investors should expect episodic volatility around fiscal deadlines, continued tariff uncertainty and potential delays in US data-centre expansion, while congressional gridlock limits the chance of rapid changes to the administration's overall policy direction.