The text below is an edited version of an Insight originally published on CRU Online, dated 5 November 2026. For the full version, contact us here..
The implications of the US midterms for commodity markets extend beyond congressional control. The new Democratic-controlled Congress will tightly constrain federal legislation, while leaving executive-led trade policy more open. Meanwhile, state decisions could reshape data centre investment, with consequences for copper and electricity demand, as well as other commodities.
Federal gridlock leaves US tariff policy risk intact
A divided government is likely to slow tax, spending and regulatory legislation. Yet the White House retains scope to pursue trade and foreign policy through executive action.
We expect tariffs to remain an important tool, serving both revenue and geopolitical objectives. Given the high level of US government debt, fiscal pressures reinforce the incentive to retain tariff income.
For buyers and producers, domestic political gridlock should not be mistaken for stable trading conditions. US tariff policy remains a distinct source of commercial risk.
State policy could redirect data centre investment
The most immediate significance of the US Midterms for commodity markets is in relation to data centres. State governments influence the conditions that determine where AI infrastructure gets built. Energy costs, regulation and tax incentives all shape project economics.
Texas demonstrates the significance of this exposure. The new Democratic governor of Texas Gina Hinojosa campaigned on a platform of pausing data center development until new rules can be agreed. The state is expected to account for nearly 30% of new US data centre capacity coming online over the following two years. Additional development restrictions could therefore affect a substantial data centre investment pipeline.
The commercial question is not simply whether US construction slows, but how much data centre investment shifts elsewhere.
Developers might seek alternative US locations or expand overseas, but relocation brings trade-offs. The US has become concerned about data centers in South East Asia allowing Chinese AI labs to use advanced chips that restrictions prevent them from buying directly. Europe presents its own drawbacks as a location for data center investment, including regulation, political opposition and high power costs.
AI infrastructure supports copper and steel demand
Data centres connect technology investment with physical commodity consumption. Our analysis estimates that US copper demand linked to data centre construction reached 400 kt in 2026, nearly doubling and offsetting weakness in other industrial sectors.
Steel demand has also benefited from non-residential construction. Slower data centre investment could weaken this support while other construction segments face financing and cost pressures. However, macroeconomic feedback mechanisms make this picture more complex. AI-related investment has accounted for a large share of incremental US GDP growth, and has therefore been one of the factors pushing up bond yields. Lower bond yields would benefit more ‘traditional’ steel-using sectors such an non-datacentre construction.
The effects of the US Midterms for commodity markets means international equipment suppliers, particularly in East Asia, would also be exposed. Investment outside the US could cushion the impact, making project geography as important as aggregate spending.
Renewables face competing policy and demand signals
More supportive state-level renewable energy policy could improve investment conditions without a federal reversal. Yet, data centres are also an important source of expected electricity-demand growth. Restrictions that slow their expansion could temper the demand supporting new power investment, offsetting some policy benefits.
Given the expected impacts of the US Midterms for commodity markets, we see a need to connect political developments with project economics, trade exposure and end-use demand.
Our market analysis supports scenario planning by examining these relationships, thereby helping businesses assess where costs could change, investment could move and commodity demand could prove vulnerable. Contact us to learn more.
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