Key Takeaways
- • Democrats have taken both the House and the Senate, holding both chambers for the first time in either Trump presidency, according to the Man Group analysis.
- • Man Group expects a near-term relative-value bounce for US assets as confidence in the rule of law, transparency and leadership is priced back in, but says the US "needs to earn it."
- • Credit spreads on hyperscaler investment-grade debt have doubled from early-2025 levels (JPM USD IG Hyperscaler Index, as at 14 September 2026), as data centre approval backlogs raise project costs and extend timelines.
- • Man Group views Pennsylvania Governor Josh Shapiro's GRID standards as the likelier template for Democratic data centre policy over Louisiana's revenue-dividend approach.
- • US inflation was 3.7% in September, driven by energy; Man Group warns the structural debt and deficit backdrop points to a likely stagflation outcome.
Summary
Democrats have taken both the House and the Senate, giving them both chambers for the first time in either Trump presidency. Man Group's Matt Rowe, Managing Director and Senior Portfolio Manager, Solutions, argues the US may benefit in the near term from a relative-value bounce and a cautious reallocation into constructive US investment, though he states the US "needs to earn it." Initial market reaction showed a dip in AI-related shares in Asia and US futures, with Treasury yields and the US dollar slipping before a stocks and bonds rebound. Man Group reads the dollar's drop as the market pricing in a higher probability of regulation, which it views as a potential constraint on growth.
What follows is expected to be gridlock. Overriding a presidential veto requires two-thirds of both chambers, which Man Group describes as normally a long shot. Republicans may nonetheless have reason to resist the President on some issues ahead of the 2028 presidential election, and Democrats will need concrete policy rather than only investigations, in Man Group's view.
Data centres were a key battleground in the election, and opposition has produced a long backlog of projects awaiting approval. According to Bloomberg data cited by Man Group, hyperscaler investment-grade spreads have doubled from their early-2025 level, and Man Group says equities are being repriced because real costs are materially higher and timelines longer. Man Group states the lack of clarity on revenue and profitability is costing investors time and money, and attributes the collateral value question more to Moore's Law than to partisan policy.
On regulation, Man Group argues investors need to know which rules will apply before committing to assets that run for decades, and that a clear framework could prove more profitable over time than current uncertainty. It points to Pennsylvania Governor Josh Shapiro's Governor's Responsible Infrastructure Development (GRID) standards, which require developers to build, bring or buy their own electricity capacity, cover grid upgrade costs, and engage communities early through public meetings and community benefits agreements. Louisiana has taken a different route: a law passed this year lets West Feliciana Parish return some data centre revenue to residents through property tax credits from 2027. Man Group considers Shapiro's model the more likely template for Democrats.
On inflation, Man Group notes that a war-driven energy price rise weighed on voters, though Congress has limited power over foreign policy and tariffs also add to price pressure. The firm says the vote changes the politics more than the economics, and argues the structural problem of debt and deficits, combined with 3.7% inflation in September, points to a likely stagflation outcome.
What follows is expected to be gridlock. Overriding a presidential veto requires two-thirds of both chambers, which Man Group describes as normally a long shot. Republicans may nonetheless have reason to resist the President on some issues ahead of the 2028 presidential election, and Democrats will need concrete policy rather than only investigations, in Man Group's view.
Data centres were a key battleground in the election, and opposition has produced a long backlog of projects awaiting approval. According to Bloomberg data cited by Man Group, hyperscaler investment-grade spreads have doubled from their early-2025 level, and Man Group says equities are being repriced because real costs are materially higher and timelines longer. Man Group states the lack of clarity on revenue and profitability is costing investors time and money, and attributes the collateral value question more to Moore's Law than to partisan policy.
On regulation, Man Group argues investors need to know which rules will apply before committing to assets that run for decades, and that a clear framework could prove more profitable over time than current uncertainty. It points to Pennsylvania Governor Josh Shapiro's Governor's Responsible Infrastructure Development (GRID) standards, which require developers to build, bring or buy their own electricity capacity, cover grid upgrade costs, and engage communities early through public meetings and community benefits agreements. Louisiana has taken a different route: a law passed this year lets West Feliciana Parish return some data centre revenue to residents through property tax credits from 2027. Man Group considers Shapiro's model the more likely template for Democrats.
On inflation, Man Group notes that a war-driven energy price rise weighed on voters, though Congress has limited power over foreign policy and tariffs also add to price pressure. The firm says the vote changes the politics more than the economics, and argues the structural problem of debt and deficits, combined with 3.7% inflation in September, points to a likely stagflation outcome.
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