Bruce Wolpe on what Trump will do after the ‘profound result’ of the US midterms - podcast

The US midterm elections on November 3, 2026, marked a significant political shift, as Democrats gained control of both the House of Representatives and the Senate, defeating the Republican party—the party with the White House. The results came amid discontent over rising living costs, the fallout from the Iran war, and President Donald Trump's trade policies, turning the elections into a referendum on his administration's performance in his first two years of his second term.

Democrats secured key seats in states like Kansas, Texas, and South Carolina, reflecting widespread dissatisfaction within the Republican Party. However, some races, including Senate seats in Alaska and Mississippi, remained undecided, leaving the final scale of the Democratic majority uncertain. Trump attempted to downplay the outcome, claiming he was not on the ballot and asserting that Republicans would have won in a landslide if his name was on the ballot.

He expressed willingness to collaborate with Democrats while noting he would veto any legislation he disagreed with. He also cited high fuel prices and certain Republican candidates as factors, acknowledging that the Iran war impacted voter choices. Vice President JD Vance emphasized the war's primary responsibility, arguing that its political consequences are tied to the Republicans' loss of Senate control for the next six years.

This divergence in interpretations highlights the war's role in the Republican party's defeat and sets the stage for debate on the party's future and leadership. The results now place the president entering the second half of his term with an opposition-controlled Congress, a stark contrast to the previous two years, when his party held both chambers, allowing him to pass legislation and secure appointments.

Democrats will now chair committees, investigate the administration's actions and decisions, subpoena officials and documents, obstruct or delay the confirmation of presidential nominees for government and judicial positions, and potentially pursue impeachment proceedings. However, a conviction and removal from office require a two-thirds majority in the Senate, a high hurdle.

While Trump retains executive powers such as the presidential veto, command of the military, broad authority over foreign policy, trade, and immigration, Democrats alone cannot override a presidential veto, necessitating a two-thirds majority in both chambers. Legislative power will not shift immediately after the results announcement; the current Congress will continue its duties during the transition, while the new majority begins on January 3, 2027.

Market reactions were initially mixed but later stabilized as the election outcome became clear. US and global stocks regained ground, with the dollar weakening, US Treasury yields falling, and oil prices dropping by over 8% on November 4, driven by speculation that the political shift might curb government spending and ease tensions related to a potential Iran conflict.

The decline extended beyond oil, with technology and semiconductor companies facing pressure due to concerns over stricter regulation of data centers and artificial intelligence. These market fluctuations do not conclusively indicate investor final assessments of economic implications, as they face legislative gridlock, budget negotiations, a potential debt ceiling crisis, and escalating tensions between the White House and Congress.

While reduced spending and trade tensions may alleviate some inflationary pressures, political stalemate could hinder efforts to tackle pressing economic issues.