Election Day rebound lifts stocks as AI trade hinges on data center politics

On Election Day, stocks rose as investors rotated back into AI-related names, with the Nasdaq up about 1% and the S&P 500 gaining half that, following three sessions of losses. The rebound was driven by semiconductor and power equipment stocks like Eaton, which raised its outlook, while Apple fell 2% on a weak gross margin forecast tied to rising memory chip costs. Treasury yields rose as bond prices fell, with economic data beating expectations. The key signal for markets is whether anti-data center rhetoric from politicians eases after the midterms, potentially clearing the way for the AI trade. Investors are also awaiting Friday's payrolls report and watching for Middle East escalation before deploying cash.