Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

1306 ET - The Federal Reserve's decision making isn't going to be affected by the Democrats sweeping the midterm elections, Chicago Fed President Austan Goolsbee says during a Q&A at a Chicago event. That's part of the central bank's mandate to be independent, he says, comparing the Fed with the Night's Watch from Game of Thrones. "You're out of the elections business," he says. The outcome of the election can impact fiscal policy, not the monetary policy handled by the Fed, Goolsbee says. Central bankers will focus on their jobs of balancing prices and employment, and will adapt to the conditions that result from fiscal policy changes, regardless of which party makes them, he says. (dean.seal@wsj.com)

1159 ET - As the capital markets digest the impacts of the midterms on the AI infrastructure buildout, lenders and investors will likely grow choosier about which developments they are willing to fund or underwrite, Morgan Stanley analysts write in a note. "Higher borrowing costs had already introduced a quality divide, with markets becoming more discerning among issuers based on their ability to maintain sound credit profiles between investment and cash generation," the analysts write. "The midterms will likely deepen that divide, as investors will favor issuers with the financial and operating flexibility to navigate policy uncertainty, redirect investment and increase the productivity of existing capacity." Hyperscalers are likely to remain the largest piece of AI-related debt supply, they add. (elias.schisgall@wsj.com)

1142 ET - AI hyperscalers including Google, Amazon, Meta Platforms, Microsoft, and SpaceX are all well-positioned to handle a new environment for data-center construction following the midterms, Morgan Stanley analysts write in a note. They leave their forecasts for hyperscaler capital expenditures unchanged, writing that hyperscalers will manage to execute on their projects, either by working with Democratic governors or adjusting to friendlier states. "We believe that the requirements set forth by newly elected Governors (such as in Texas and Ohio) are broadly achievable by leading data center developers," they write. Even if the buildout cycle is prolonged by a slower pace of development, that would increase the value of existing compute capacity, also benefiting hyperscalers. (elias.schisgall@wsj.com)

1123 ET - The market last week overreacted to the Democratic midterms victory, Morgan Stanley analysts write in a note, arguing that fears of a major disruption to the AI infrastructure buildout. They write that new governors are unlikely to intervene in projects currently under construction, with the main impact likely being that 2028 projects in Texas and Ohio will be delayed until 2029. Some hyperscalers may try to shift data centers to friendlier states, and the analysts project potentially 20 gigawatts of capacity spilling over into international markets. "More fundamentally, we believe that, in many US states, there is a path forward for data center development that can work for all constituents," the analysts write. "Thus the impact of the election skews toward a delay, rather than a reduction, in data center volumes." (elias.schisgall@wsj.com)

0922 ET - Oil futures start the week sharply lower after President Trump told CNN that the U.S. is "highly unlikely" to renew attacks on Iran if talks continue to make progress. His comments further reduce expectations of Middle East escalation, which eased last week after the Democrat midterm election sweep. "We remain skeptical that U.S.-Iran discussions will yield fruit," EBW Analytics says in a note. "Still, if regional crude exports remain stout, the U.S. may have less reason to restart an active military campaign." WTI is down 4.4% at $86.82 a barrel and Brent is off 4.6% at $93.76 a barrel.(anthony.harrup@wsj.com)

0638 ET - Cryptocurrencies are facing a much less benign environment under a Democratic Congress, according to IG strategist Chris Beauchamp. Recent selloffs in tech stocks and concerns that the Iran war will resurface have dented bitcoin's prospects, but IG sees the Democrat 'blue wave' in the midterm elections as chiefly responsible for its decline. "The Republicans positioned themselves squarely behind cryptocurrencies, but now the reckoning is due," he says. "The new Democrat-controlled Congress is poised to investigate the Trump administration from top to bottom, and cryptocurrencies will not be immune." Bitcoin is 0.5% higher at $74,445. (joseph.wilkins@wsj.com)

0417 ET - Oil prices fall more than 1% after President Trump told CNN it was "highly unlikely" he would order renewed attacks on Iran as long as peace negotiations continue to progress. In early European trading, front-month Brent crude is down 1.8% to $96.57 a barrel, while WTI futures slide 1.2% to $89.74 a barrel. Both benchmarks plunged more than 15% last week after Democrats swept Congress, fuelling hopes of a diplomatic resolution to the conflict in the Middle East. However, continued threats to shipping in the Gulf have tempered optimism. "The conflicting backdrop of greater hopes for an end to the conflict and continued attacks on oil tankers means that investors remain just as uncertain about the medium-term path for oil prices as they were before the elections," Hamad Hussain of Capital Economics says. (giulia.petroni@wsj.com)

0331 ET - U.S. and Europe credit spreads could face high volatility in the near-term due to uncertainty around the AI industry, Societe Generale's Juan Valencia says in a note. Nonetheless, credit assets are favorable over the long-term as companies continue to post strong earnings and corporate debt levels remain manageable, Valencia says. Investors fear that the AI sector could face tighter regulation after Democrats gained control of the U.S. Senate and House of Representatives in last week's midterm elections. (miriam.mukuru@wsj.com)

0322 ET - Eurozone government bond yields edge lower in opening trade, as markets tentatively stabilize amid a fall in oil prices. The current quiet pattern of trade contrasts with last week when the Democrats' sweep in the U.S. midterm election prompted sharp falls in yields, before Friday's robust employment data led to rises. "Short-term global bond yields remain on a downward trajectory if oil prices continue to decline despite a stronger-than-expected U.S. labor market report released on Friday," Danske Bank's Jens Peter Sorensen says in a note. The 10-year German Bund yield falls 0.3 basis points to 3.244%, according to Tradeweb.