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[Democratic Victory Shifts Policy Expectations, Pressures AI Infrastructure and US Treasury Outlook] ⑴ Following Tuesday's landslide victory for the Democrats, market narratives quickly shifted towards risk appetite. Investors accepted Trump's promise of cooperation with the Democrats and believed that a political deadlock would benefit Wall Street. Nasdaq 100 and S&P 500 futures rebounded sharply after falling 2.4% and 1.4% respectively. ⑵ However, this rebound largely reflects the unwinding of hedging positions accumulated over the past few trading days, rather than a genuine improvement in the outlook. This enthusiasm for bipartisan cooperation may not last more than a week. Trump had just indicated his willingness to accept the election results when he subsequently released a hat with the word "veto" printed on it, and House Oversight Committee Chairman Garcia responded to the White House with "prepare lawyers." ⑶ With the Democrats securing their largest House majority since 1993 and controlling the Senate, familiar investigations, subpoenas, impeachment proceedings, government shutdowns, and debt ceiling-bound policies may be repeated, rather than the benign deadlock Wall Street expected. (4) Tuesday's Democratic landslide victory, the most surprising outcome and potentially most impactful on the AI bubble, was the sweep of gubernatorial elections in Texas, Georgia, and Ohio—three key states for data center construction. (5) The Democratic winners pledged to limit new projects, and Texas Governor-elect Hinojosa stated that the existing permit freeze would continue until full regulations are implemented, potentially pushing multi-gigawatt capacity from 2027 to 2028 and threatening hundreds of billions of dollars in capital expenditure. (6) The anti-data center movement is no longer confined to one party; rising electricity prices, water consumption, and infrastructure demands have made AI a political burden, with polls showing that a majority of voters consider AI and data centers key or important factors in their congressional votes. (7) With control of Congress, Democrats are expected to intensify scrutiny of the relationship between hyperscale corporations and the White House, hold hearings for tech executives, and push for AI development and data center energy consumption regulations. (8) For US Treasury bonds, the initial risk appetite reaction is seen as a selling opportunity rather than a lasting shift in sentiment. The traditional narrative of a deadlock being beneficial ignores the risks of prolonged fiscal standoffs, debt ceiling threats, government shutdowns, and investigations. (9) The Democratic Senate majority also allows them to block judicial and executive appointments, while Iran's deployment of mines and underwater drones targeting Persian Gulf shipping following Monday's U.S. strike on Qeshm Island adds to geopolitical uncertainty. (10) The Democratic landslide victory comes at a time when the AI investment boom increasingly relies on massive debt issuance, high valuations, and ongoing data center construction, and in a politically hostile environment, AI deals could crumble more quickly.