Analyst: If AI capital expenditure slows, it may affect the Fed's rate hike prospects and US Treasury yields.

Aptus Capital Advisors portfolio manager John Luke Tyner said in a report that markets should watch whether AI capital expenditure and data center construction slow—or merely relocate to states with more favorable government policies—after Democratic gains in gubernatorial elections. Tyner expects related investment to decelerate, but by less than the market fears. On Federal Reserve policy, he said that if the main inflationary pressures come from energy prices and AI spending, the September 25-basis-point hike was likely the last of this tightening cycle. He added that government gridlock typically drags on GDP growth, which could open room for further declines across the Treasury yield curve. The remarks matter because they tie AI infrastructure spending to the Fed's rate path and Treasury yields, making data center investment trends and energy prices the key signals to watch next.