Editor's Choice: US anti-data center sentiment spreads, hitting Asian markets

Japanese benchmark Nikkei Stock Average dropped to below the 60,000 threshold for the first time since mid-May. (Photo by Kazuho Fujiwara)

Hello from Tokyo. The U.S. midterm results are out, and the Democrats won control of both chambers of Congress. The party's unexpectedly strong performance sent shock waves through Asian stock markets, with the Tokyo Stock Exchange posting sharp losses.

First, one trend Nikkei Asia closely watched throughout the election campaign has been starkly underscored: growing public opposition to data center construction. In Texas, one of the country's largest data center hubs, voters ousted the incumbent Republican governor and elected a Democrat. The incoming governor has openly opposed the rapid expansion of data centers. Democrats also prevailed in Ohio, another state known for its concentration of data centers.

Investors interpreted the Democrats' sweep as a headwind for the technology sector, triggering a sell-off in U.S. tech stocks on Thursday. The weakness spread to Asian markets on Friday, with Tokyo's Nikkei Stock Average falling below the 60,000 level for the first time in nearly six months. America's emerging anti-data center movement, which will affect Asia's technology supply chain, is likely to become a major theme for Nikkei Asia's coverage going forward.

Having lost majorities in both the House of Representatives and the Senate, President Trump now faces significant constraints on domestic policy. As a result, he may increasingly turn his attention to foreign policy, where congressional limits are less direct. One immediate focal point will be the APEC leaders summit later this month, where Trump could pursue surprising deals with major powers such as China and Russia. The president's stance on the Iran war, widely viewed as a factor in his party's defeat, will also have important implications for Asia's energy policies. We urge you to explore Nikkei Asia's coverage for more insight.

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