Democratic midterm sweep could be bad for AI, good for healthcare, EPFR says
SPY•EPFR said investors see a potential Democratic sweep in next month’s U.S. midterm elections as a headwind for AI and data centers but supportive for healthcare and infrastructure. AI-focused funds recorded inflows in 26 of the past 27 weeks, while clean-energy and electric-vehicle funds saw continued outflows.
1. Election sector outlook
EPFR said a Democratic sweep could bring stricter environmental requirements, more local opposition to data center projects and proposals requiring developers to shoulder more power-related costs. A Republican-controlled Congress is generally seen by investors as more supportive of rapid AI deployment and data center expansion.
2. Fund flow trends
Despite those concerns, data centers and AI infrastructure funds attracted inflows for 12 of the past 13 weeks and 27 of the past 32 weeks. AI-focused funds saw inflows in 26 of the past 27 weeks. Clean-energy funds recorded their 17th outflow in 20 weeks, with redemptions at an 11-week high; electric-vehicle funds saw outflows for the 16th time in 24 weeks, with redemptions at a 37-week high.
