Review · Policy News
Donald Trump was celebrating Americans’ booming retirement accounts on Wednesday. By Thursday, he was blaming the Democrats for wrecking them. "Your 401(k)s have, therefore, dropped," the president complained on Truth Social after Wall Street suffered its worst sell-off since April 2025.
"Remember, it wasn’t Republicans, it was Dumocrats." This time, Trump has a point. A day after Democrats trounced Republicans at the midterm elections , investors began questioning whether the artificial intelligence boom that has powered Wall Street’s extraordinary growth under the Trump administration can continue apace. Much of the concern centers on the Democrats’ increasingly hostile attitude toward data centers —the enormous, electricity-hungry facilities underpinning AI development.
Read More on News On Thursday, the technology-heavy Nasdaq plunged 5.5 percent, wiping out roughly $2.5 trillion in market value. The S&P 500 fell 4.4 percent, while Nvidia, the chipmaker at the center of the AI revolution, shed 9.3 percent. These losses will trouble Silicon Valley billionaires, but they’ll be OK.
Millions of Americans who hold shares in the companies driving the AI boom through their 401(k)s and other retirement accounts, perhaps less so. ... Bursting the Bubble Texas Governor-elect Gina Hinojosa has promised to pause new data-center approvals until the state introduces stronger protections for local communities. Other Democrats have campaigned on similar restrictions, raising the prospect that America’s extraordinary AI construction boom could face significant obstacles.
But the Democrats didn’t create the industry’s problems. Investors had been fretting for months about whether the hundreds of billions of dollars being poured into AI infrastructure would generate sufficient profits to justify the expenditure. Rising borrowing costs had already battered debt-heavy AI companies, while the Nasdaq was already more than 8 percent below its October 6 peak on Election Day.
If there’s an AI bubble, the Democrats didn’t inflate it; their victory was just another pin in the hands of nervous investors. Americans can hardly be upset or surprised by these consequences. An October ABC News/ Washington Post /Ipsos poll found that 72 percent of Americans oppose the construction of new data centers in their communities, including 58 percent of Republicans.
Their concerns are valid; data centers consume vast amounts of electricity and water, and residents are increasingly worried about the pressure they place on local resources and utility bills. But there’s an economic trade-off here. You can’t demand restrictions on the infrastructure supporting America’s most valuable technology companies while expecting their share prices to continue rising indefinitely.
The public has made its concerns clear, Democratic politicians are responding, and investors are adjusting their expectations accordingly. ... Silver Linings The stock market isn’t the only place where expectations are changing, though, and the Democrats’ victory has produced a more-welcome development elsewhere. On Wednesday, the price of oil plunged roughly 8 percent after the election results.
By Friday morning, Brent crude was on course for a 16 percent weekly decline—its steepest since the beginning of the COVID-19 pandemic—and fuel prices had begun to slide. Investors are increasingly hopeful that a Democratic-controlled Congress could strong-arm the Trump administration into winding down its costly war on Iran. This is one of the main contributing factors to sky-high gas, diesel and everyday costs that became the torpedo that sank the GOP’s midterm ship.
It’s not a done deal, of course. Democrats can’t simply vote the conflict out of existence, and Washington remains locked in a highly complex stalemate with Tehran over the Strait of Hormuz. But after months of punishing costs and stubborn inflation, the prospect of cheaper fuel is welcome news for American households.
The national average price of regular gasoline fell 12 cents over the past week to $4.10 a gallon as of Thursday, while diesel fell to around $6.26, according to AAA. Both remain well above their prices a year ago, but are trending in the right direction, down from September highs of roughly $4.48 for gasoline and a record $6.53 for diesel. For Americans who’ve spent months watching their purchasing power erode while Trump insisted the economy was thriving, that’s no insignificant development.
It also brings us back to the economic contradiction that helped decide the midterms. Americans have spent months telling Trump they are more concerned about the price of everyday necessities than the performance of Wall Street. The election results show they meant it.
Americans have also made it abundantly clear that they want fewer unwanted data centers, but nobody wants to see their retirement savings shrink. These objectives aren’t necessarily incompatible in the long run, but, in spite of what the outdated American dream would have you believe, you can’t have everything. Cultivating a healthy investment account to see you through the golden years is important.
In the meantime, a little relief at the gas station would be something worth giving thanks for.
Source: Newsweek
