Fidelis Capital sees rising political risk for data-center development after midterms
SPY•Fidelis Capital said projected Democratic control could raise data-center development costs and slow capital spending through reduced tax incentives and tougher environmental requirements. It expects tighter fiscal and monetary conditions in 2027 but remains constructive on the 12-month equity outlook.
1. Political and sector risks
Fidelis Capital said projected Democratic control raises risks for data-center development, as reduced tax incentives and tougher environmental requirements could increase costs and slow capital spending. It expects fiscal and monetary conditions to tighten in 2027 as stimulus fades, capital spending slows and Federal Reserve policy remains restrictive.
2. Market outlook
The firm said financial companies could face renewed pressure for a 10% cap on credit-card interest rates, though near-term deregulation may offset risks. Pharmaceutical companies face headline risk from broader drug-price control proposals, even if legislation is unlikely to pass. Fidelis Capital’s 12-month equity outlook remains constructive; it said the S&P 500 has not declined in the year following midterm elections since 1938.
