US Inflation and AI Volatility Follow Democratic Midterm Sweep

The Federal Reserve System is preparing for its December 8-9 meeting to determine interest rate hikes as the Bureau of Labor Statistics prepares to release October Consumer Price Index data. Economists project a 0.3% month-over-month increase, with core inflation rising 0.2%. While gasoline prices dropped from $4.41 to $4.18 per gallon in October, costs remain significantly higher than before the war in Iran began in February.

These economic pressures, alongside the impact of global tariffs and the war in Iran, contributed to a Democratic sweep of Congress in the recent midterm elections. Voters cited high inflation as a top issue, while some expressed frustration over the unchecked growth of AI data centers. In response, Texas Governor-elect Gina Hinojosa has pledged to delay data center permits to protect residents, contrasting with President Donald Trump's strong support for data center development and super intelligence.

Corporate volatility has intensified as Nvidia shares entered a bear market. The company launched an investigation into CEO Jensen Huang after U.S. intelligence identified a woman with whom he had a relationship as a Chinese spy. Simultaneously, the tech sector faces rising costs for AI-related memory, forcing companies like Apple Inc. to increase consumer prices. In the energy sector, global oil prices have declined on hopes for a diplomatic resolution with Iran, though attacks on Saudi Arabian oil infrastructure continue.