Blue Wave Sinks Energy Stocks: NRG Down 12%, Oil Below $100

NRG Energy fell 12% and Vistra dropped 15% on Wednesday as a Democratic blue wave in the midterm elections wiped out billions in energy stock value, pushed crude below $100 a barrel for the first time in nearly a month, and cut Wall Street's odds on bipartisan permitting reform nearly in half.

TD Cowen analysts slashed their projection for passing the Bipartisan American Affordability and Jobs Act (BAAJA) from 40% to 25% during the lame-duck session before the new Congress is sworn in. Anti-fossil-fuel Democrats now have leverage, and analysts expect many to push for waiting until next year. The Dow rose 3% on the same day, celebrating expected gridlock — the energy sector moved the other way.

What did voters actually decide?

Charles Hua, executive director of the nonprofit PowerLines, called the result a referendum on spiking utility bills, gasoline costs and inflation's ripple effects across the economy. "You only get such seismicity in political results if something is fundamentally unsteady or unstable, and I think one of the big manifestations of that really has been energy costs," Hua told Fortune.

Voters weighed in on data centers directly. More than 40 local ballot measures on restricting or regulating data centers were on Tuesday's ballots. All but one — in North Dakota — passed. "That's a staggering statistic," Hua said.

How hard did the 'Texas shock' hit?

Julien Dumoulin-Smith, an analyst at Jefferies, flagged the state as the epicenter. "The most impactful surprise is the magnitude by which Texas voted Democratic, imperiling the outlook for data center developments," he wrote.

The damage spread across the supply chain. Gas turbine maker GE Vernova dipped 10%. Quanta Services, the top transmission developer, fell 12%. Tesla and SpaceX leader Elon Musk — after spending hundreds of millions on GOP candidates without success — posted on X: "Data Centers in space looking pretty appealing right now."

Not every energy name lost. Florida stayed Republican, and its utilities were rewarded: NextEra Energy jumped 5% and Duke Energy rose 3%. Renewable developers gained as more clean-energy-friendly Democrats won: First Solar rose over 4%, and solar parts maker Nextpower spiked 13%.

Why did oil fall below $100?

President Donald Trump downplayed the potential for escalation in Iran, and Vice President JD Vance blamed his party's losses on the war. The global benchmark fell 8%, below $100 per barrel. Producers and refiners took the hit: ExxonMobil dipped 4%, Chevron 5%, Marathon Petroleum plunged 9% and Valero Energy fell 7% — both refiners despite record recent profits.

"We had a referendum on inflation, high oil prices, and Trump in general," said Dan Pickering, founder of Pickering Energy Partners. "It feels like Trump will have more pushback and less maneuverability around how he wants to conduct the conflict in Iran."

Pickering cautioned that optimism on peace talks does not end the war. Trump could opt for escalation between now and January, as he himself predicted before the election. "I think the Iran conflict gets more complicated for the U.S. We've been looking for an off ramp, but we want an off ramp that doesn't leave the Middle East in chaos," Pickering told Fortune. "Oil is down, but it's not cratering."

What happens to permitting reform now?

The BAAJA would expedite construction of energy projects of all kinds — renewable and fossil — and the long-distance transmission lines that most benefit wind and solar, which is why Quanta's shares sold off. Democrats may prefer a narrower clean-energy-transmission package, or no deal at all. "With greater leverage heading into 2027, Democrats have less incentive to accept pipeline provisions during the lame duck, pushing the debate toward a narrower clean energy-transmission package or no deal," Dumoulin-Smith added.

The bill's Democratic sponsor, Sen. Sheldon Whitehouse of Rhode Island, urged his party to pass it now anyway. "Democrats ran and won on affordability, and this bill lowers costs for families and will allow us to start delivering on our election promises," Whitehouse told Fortune in a statement. "It's a bird in the hand. We'd be fools not to take it."

The risk is structural: any deal delayed to 2027 still requires Trump's signature. Meanwhile, Democratic challengers won governorships in Texas, Georgia and Ohio — the three biggest data center growth states — while campaigning for moratoriums. "'Moratorium' certainly is the buzzword," Hua said, though it remains unclear whether that means temporary pauses or outright opposition.

By Olivia Hart