JPMorgan warns a midterm 'blue wave' could torpedo the AI data center boom powering your 401(k). Protect your portfolio now

“If Republicans maintain control of Congress, that would likely provide the most supportive incremental federal policy backdrop for the AI/Infrastructure buildout,” wrote Lakos-Bujas.

That scenario looks unlikely right now.

AI stocks make up 45% of the S&P 500 market cap. Your 401(k) could be exposed to the S&P 500, so it’s important to know how the election will affect your portfolio. Here’s what to know.

How data centers became a partisan issue

AI providers rely on data centers as a way to increase capacity, but Americans nationwide have responded harshly to politicians seeking to build them.

For many voters right now, the cost of data centers in their region is a hot-button topic. Many voters are also worried about the environmental impact of data centers.

Despite this, AI has become a key issue for the Trump administration. In December 2025, the Pentagon launched GenAI.mil, a platform encouraging AI use in the military. On September 29, 2026, Trump signed an executive order replacing the term AI with SI, an abbreviation meaning “super intelligence.”

Many of Trump’s most loyal followers — including billionaires Elon Musk and Larry Ellison — have companies that either operate AI data centers or rely on their continued growth.

Trump himself has spoken at political rallies defending data centers. At a rally on October 3, 2026, for Sen. Jon Husted, he spoke at length about data centers. Attendees were tepid in response, though.

Many Republicans believe that if Husted fails to win reelection, it could trigger a national shift in enthusiasm for data centers — forcing politicians to shift their positions.

A memo from the National Republican Senatorial Committee puts it bluntly: “This has become a sleeper issue for the entire election cycle … If Husted loses because of data centers, the industry will be blamed, and elected officials or other parties will learn a cautionary lesson.”

What to do with your 401(k) if a ‘blue wave’ hits

The good news for most people is that regardless of what happens in November, the basics of saving for retirement don’t change that much.

That’s because the most common form of retirement account for most Americans, the 401(k), is rarely focused on individual stocks.

While some workers have access to self-directed brokerage accounts, the majority of companies do not opt to offer these types of accounts to their employees. Instead, most people just invest in funds that meet their needs.