Democrats take control of Congress as data center curbs win 40 of 41 local votes
Key Facts
Democrats won control of both chambers of the U.S. Congress in the midterm elections held on November 3, in a result the Associated Press described as a strong rebuke to President Donald Trump and Republicans. In accompanying local votes, voters backed restrictions on data center development in 40 of 41 contests, according to Ballotpedia. The political result and local votes give momentum to community opposition to infrastructure projects linked to artificial intelligence. But they do not by themselves establish a change in investment plans or an increase in real estate investment trusts. The moves came as U.S. stocks posted strong gains and oil and Treasury yields fell in the November 4 session.
Ballotpedia said voters approved 27 measures limiting data center development or expressing opposition to it, and rejected 13 measures that would have backed development or expressed support for it. Harwood, North Dakota, was the exception to the overall result: its voters did not support limiting development. The 41 votes were held across 10 states, with Ohio recording 21 measures in its communities. Nationally, about three-quarters of voters said they opposed a new data center being built in their communities, while about one-quarter said AI data centers were a decisive factor in their vote for Congress. These figures reflect the issue’s presence in the election debate, but concern voter preferences and local voting.
In markets, the S&P 500 rose 1.6% on November 4, its best session in three months, while the Dow Jones gained 3% and the Nasdaq Composite rose 1.4%. Brent crude, by contrast, fell 8.7% to $94.62 a barrel. The 10-year U.S. Treasury yield declined to 4.88% from 4.95% late Tuesday, November 3. The Associated Press attributed some of the pressure on oil to a decline in inflation risks associated with it and the possibility of lower federal borrowing. The available facts do not provide a direct reading of real estate investment trust performance in that session, so no specific move in the sector can be attributed to the election result or falling yields.
Listed real estate enters this development against a backdrop of mixed performance this year. Cushman & Wakefield reported that the real estate investment trust index posted a total return of 11.7% from the start of 2026 through the end of October, after falling 6.4% between June and September as Treasury yields rose. The company said the return in the 12 months following midterm elections was 8.5% in historical comparisons, versus 11.7% in other comparable periods. But it said election timing was not a reliable indicator of commercial real estate performance, and that economic growth, interest rates and credit availability had a greater impact. The 10-year Treasury yield rose from below 4.60% in late July to 5.27% at the end of September, which Nareit described as a headwind for real estate returns.
In the data center sector, Goldman Sachs’ October forecasts did not point to a material change in its near-term U.S. growth outlook through 2027 despite rising political opposition. The company raised its forecast for total capacity at the end of 2026 by 5 gigawatts to 64 gigawatts, and cut its 2027 forecast by 5 gigawatts to 90 gigawatts. It also forecast U.S. electricity demand from data centers to grow 38%, or 12 gigawatts, in 2026, and by the same percentage, or 17 gigawatts, in 2027. For real estate linked to data centers, Nareit said the sector posted a total return of 25.6% from the start of 2026 through September, outperforming global real estate sectors in its comparison. These estimates point to continued expected expansion in capacity and electricity demand alongside local opposition.
October labor market data showed 165,000 jobs added, compared with economists’ forecast of 65,000, while the unemployment rate stood at 4.1%. Average hourly earnings rose 0.4% from September, the largest monthly increase since January, and 421,000 people entered the labor force. The combination of job growth and an expanding labor force means unemployment fell despite more people entering the labor market, according to the Associated Press. The October Consumer Price Index is scheduled for release on November 10 at 8:30 a.m. Eastern time. On the same day, Federal Reserve Governor Christopher Waller is scheduled to speak on the economic outlook at the Bank of England and Financial Times’ The Banker’s annual conference in London.