Goldman Sachs has released a research report noting that the Democratic Party has won majority seats in both the U.S. House of Representatives and the Senate, with a margin far larger than expected.
The larger majority advantage may give the Democratic Party slightly greater bargaining power in negotiations with the White House, but it will also weaken the influence of small factions within the Democratic caucus.
The firm expects that the Democratic Party will use fiscal deadlines to seek to restrict the war with Iran, roll back some tariffs, and reverse the spending cuts implemented last year.
Goldman Sachs points out that at the federal level, the election results are less likely to change the outlook for data center and artificial intelligence regulation, because related legislation still requires bipartisan support to pass the Senate and overcome a presidential veto.
However, Democratic victories at the state and local levels are expected to lead to short-term moratoriums on data center construction, potentially affecting about 45% of planned data center capacity expansion in the United States, with Texas alone accounting for about 25%.
The firm expects that if the Democratic Party reverses the spending cuts in last year's fiscal package, the increase in spending in 2027 will be approximately equivalent to 0.25% of GDP.
The first test will come on December 11 when the spending authorization expires, and the firm believes a short-term extension to February or March 2027 is the most likely outcome.
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