MARKET UPDATE: What The Blue Tsunami Means For The Markets

The election was characterized as a rejection of Trump rather than of conservative principles or an endorsement of a sweeping Democratic agenda. Affordability and quality of life were central: speakers said Trump had failed to bring down inflation, tariffs shaped perceptions of the economy, and Democrats connected more effectively with voters’ concerns. JD Vance reportedly cited four reasons Trump’s 2024 voters were angry and considering Democrats: the Iran war, living costs and inflation, putting America first, and the relationship with Israel. The result showed voters could cross party lines, but the speakers disagreed about how long Democrats would have to deliver before voters reconsidered. They described the gains as centrist nationally, despite DSA-aligned wins in some cities, and said Republicans could win voters back with effective action on affordability.

Kalshi and Polymarket were said to have adjusted better than polls for polling bias, and Kalshi’s Democrat index might have offered a trade; a pollster cited by JD Vance reportedly projected Republicans would lose the generic ballot by 13 points. Markets rose after the election, though one speaker said an unchanged market would also have demonstrated resilience. The speakers described markets as healthy and well positioned, and one expected a gradual rise over the next three months after midterm fears eased, citing a tendency for markets to de-risk before midterms and bottom around them. They favored remaining long equities, Bitcoin and the Nasdaq rather than selling everything. Political gridlock could constrain regulation and legislation, but the political direction emerging by 2028 could matter more for risk assets; the election’s foreign-policy impact may be limited because Trump retains unilateral control.

Oil was down 8% on the day discussed, while diesel was cited at $5 per gallon. The speakers differed on whether current oil prices were an opportunity or a risk, given that the Iran conflict could escalate again. One estimated oil would be about $50 without geopolitical risk and said it was difficult to trade at current levels. If the war ends, that speaker expected oil and inflation to fall, benefiting stocks, hyperscalers and the Nasdaq; renewed Israel-Iran escalation or a prolonged US campaign could lift oil and hurt markets. The speakers also disagreed on the war’s results: one saw a political mistake but was unsure it was a geopolitical one, while another said the mission had pushed back Iran’s nuclear threat, though questioned whether gains would last without regime change. They said Trump’s military action might have a national-security rationale, but its costs and necessity had not been explained effectively.

Opposition to data-center construction emerged as a risk to infrastructure investment. Speakers cited 41 local ballot measures in 10 states where 70–80% of voters opposed data centers, and an NBC exit poll in which 56% said AI and data centers were a major factor in their congressional vote. They described the backlash as bipartisan but doubted a nationwide ban, suggesting projects might shift to deep-red states such as Alabama and Florida. Officials have emphasized union labor, power contracts that do not raise grid costs, and environmental reviews—conditions that could also delay or stop projects. A slowdown could weigh on chipmakers and copper, while constrained compute supply could raise prices and near-term revenue for Anthropic and OpenAI. One speaker expected governors to moderate opposition if they concluded data centers were essential to the US economy.

The speakers disagreed on chipmakers: one viewed a dip as a buying opportunity, while another no longer wanted to own chips, defense companies or neoclouds and preferred top technology stocks and crypto. That speaker expected hyperscalers to benefit if construction slowed, and said they had sold Intel at $74 after earnings and weaker fourth-quarter guidance, waiting for Intel in the 40s and SanDisk in the 600s before buying. Another argued chip demand could shift offshore rather than disappear, pointing to China’s silicon constraints and the possibility that unused US data-center silicon could go there if exports remained allowed. US environmental restrictions combined with export bans on Intel and Micron could badly hurt domestic chipmakers, though the speakers considered that combination politically unlikely. One speaker favored shorting Galaxy, arguing its value depended on regulatory clarity and domestic high-yield data-center construction; if a moratorium halted its Helios Texas project before it secured sufficient power and infrastructure, the stock could fall further, potentially to $8.

Crypto regulation was another point of disagreement: one speaker saw gridlock as a risk to projects needing approvals or clarity, while another said most elected Democrats were not ideologically opposed to crypto and that targeting bad assets could improve the ecosystem. Bitcoin was described as “post-regulation,” with one speaker forecasting a $1 million price in 10 years on the grounds of continued dollar debasement. Proposed shorts included Trumpcoin, whose market capitalization was cited at $365 million and fully diluted valuation at $1.2 billion, and DJT, at $1.38 billion in market capitalization; one speaker thought Trumpcoin could fall to $50 million after Trump leaves office. The speakers also considered the rejection of California’s proposed billionaire wealth tax constructive for markets, while noting that political gridlock and opposition to Trump do not guarantee a lasting Democratic governing plan.