Investing.com -- Goldman Sachs told clients in a new note that Democrats’ larger-than-expected wins in the midterm elections could have significant implications for AI and data center regulation, particularly at the state and local level.

Goldman’s Jenny Grimberg said the bank expects Democrats to use their new majorities in Congress to push for policy concessions around upcoming fiscal deadlines.

“With Democrats winning much larger-than-expected majorities across the House and Senate, we expect them to leverage upcoming fiscal deadlines to seek policy concessions, specifically to limit the Iran war, roll back select tariffs, and reverse recently-enacted spending cuts,” she wrote.

Goldman also expects Democratic wins in state and local races to bring tighter AI and data center rules. Its equity analysts see this weighing on some U.S. utilities and independent power producers, which sell electricity to data centers. However, the bank expects the issue to become less important over time.

“We expect the data center issue to somewhat fade in importance ahead and any moratoria on data center development to be short-lived,” Grimberg said.

The bank noted that the oil risk premium has fallen significantly since the election. Still, it recently raised its average 2027 Brent forecast to $88 a barrel from $80, citing downside risks to Middle East supply. As a result, Goldman now expects weaker growth and higher inflation in Europe next year.

The bank expects S&P 500 earnings growth to slow from nearly 30% this year to 18% in 2027.

Goldman sees major AI and data center policy implications from ‘blue tsunami’ Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.

Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.

Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.

It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the s or advertisers.