Democrats Sweep Congress! Morgan Stanley Rushes to Redraw Trading Map: Equity Overweight Unchanged, AI Data Centers the Biggest Loser

Zhitong Finance APP has learned that Morgan Stanley pointed out in its latest research report that the Democratic Party has won control of the House of Representatives and the Senate, although some election results are still being counted. This decisive election result indicates that the situation is developing toward the "cohesive Democratic majority" scenario envisioned by the bank. Under this scenario, the uncertainty brought about by a change in governing power may become a headwind for overall stock market performance, with an impact similar to the market volatility triggered after the 2022 midterm elections when the Republican Party newly took control of the House of Representatives. However, cuts to SNAP (Supplemental Nutrition Assistance Program) and Medicaid may be delayed, which would be beneficial for the consumer sector and expose economic growth forecasts to some upside risk.