Democrats Win Congress as War, Tariff and Drug Tests Loom

By Daniel Okafor

Democrats have won enough seats to run both chambers of Congress, the Associated Press said, as midterm election results continue to be tabulated. The result will hand Democrats the House and Senate two years into President Donald Trump’s second term, according to MarketWatch, and likely begins another period of divided government in Washington, D.C., in January. MarketWatch said the shift is likely to affect Americans’ investments and wallets.

MarketWatch reported that Democrats are expected to ramp up challenges to Trump’s handling of the Iran war and his administration’s immigration policies. They are also expected to push a significant healthcare-focused bill aimed at medical costs. Some analysts expect the party to challenge Trump’s import taxes, starting with his tariffs on Canadian goods.

What changes under Democratic control?

Dean Stansel, a research professor at the Bridwell Institute for Economic Freedom at Southern Methodist University’s business school, expects a sharp change in congressional treatment of the Iran war.

“There’s just hasn’t been the level of pushback on some of the things being done like the war in Iran. I think you will see that change pretty dramatically when the new Congress takes office,” Stansel told MarketWatch.

MarketWatch links higher gasoline and diesel prices to the Iran conflict, giving Democrats a concrete affordability argument against the administration that reaches directly into household budgets. Trump’s immigration policies have also restricted the supply of labor.

Stansel tied his optimism on immigration to the affordability and inflation concerns among voters.

“Democrats do tend to be less anti-immigration in most cases, and so I have some optimism that there might be some more sensible policy put in place in that department, which would directly affect this affordability and inflation issue that voters are so concerned about,” Stansel said.

Stansel was less optimistic about changes to Trump’s import taxes. He said he was “just not so sure that the Democrats are that staunchly anti-tariff, compared to Republicans.”

How will the Senate constrain appointments?

Trump is likely to struggle to win Senate confirmation for his picks to the Federal Reserve, the judiciary and other parts of the government, MarketWatch reported, citing analysts.

With Democrats holding the Senate, confirmation votes could become a systematic obstacle to Trump administration choices for the Federal Reserve, the judiciary and other government posts.

Where might Democrats compromise?

Some analysts cited by MarketWatch see housing affordability as a likely area for compromise because Democrats “will need to show they can govern versus simply obstruct.”

On housing affordability, some analysts think Democrats may need visible legislative progress to prove they can govern rather than merely block Republican priorities, which creates room for negotiated action.

Which public companies face scrutiny?

For months, Democrats appeared on track to take at least one chamber. MarketWatch expects that control to bring public companies more attention, not necessarily the kind that lifts stock prices. The report identified these potential targets:

• Pharmaceutical companies that made drug-pricing deals with the Trump administration.
• Companies that granted equity stakes to the Trump administration, such as Intel.
• Corporate donors to Trump’s controversial White House ballroom project, including Amazon, Apple and Meta.
• Companies working in artificial intelligence, such as Google, which could face new probes from congressional committees.
• Oil companies, if the Iran war drags on and fuel prices remain elevated.
• Trump ally Elon Musk, CEO of SpaceX and Tesla, who appears poised to face increased scrutiny.

The list spans drug pricing, administration-linked equity, political donations, artificial intelligence, energy prices and a prominent chief executive, giving Democrats several routes for hearings and investigations.

What changed after the 2024 election?

Republicans have controlled the House, Senate and White House as a unified bloc since the 2024 election. MarketWatch identified last year’s enactment of the “One Big Beautiful Bill Act” as a key achievement of that period, with tax breaks for companies and individuals.

The comparison with 2022 is direct: Republicans then won the House while Democrats kept the Senate, but now Democrats control both chambers and can scrutinize the White House across the government.

Stocks were negative early Wednesday but recovered some ground as markets adjusted to the prospect of a Democratic midterm wave, MarketWatch reported.

The coming session will test whether Democratic control changes policy on fuel prices, labor supply, healthcare costs and tariffs, while Senate confirmation fights determine how much unilateral power Trump retains.