Democrats will control both chambers of Congress from January, according to race calls by The Associated Press. That ends two years in which Republicans held the House, the Senate and the White House at once. For businesses and investors, the result trades one set of questions for another. Sweeping tax and tariff legislation becomes less likely. What remains are the bills that must pass, and the first of them is due in 37 days.
Where the count stands
As of 12:39 p.m. Eastern time on Wednesday, NBC News had called 236 House races for Democrats and 146 for Republicans, with 53 still to be called, a net Democratic gain of 31 seats so far. A majority is 218. AP called the House for Democrats early on Wednesday, after calling the Senate late on Tuesday, NPR reported from its tally of AP calls.
In the Senate, Democrats and the two independents who caucus with them had won 54 seats to the Republicans' 44 by Wednesday morning, Forbes reported. The races in Alaska and Mississippi were too close to call. Democrats took seven seats from Republicans, in North Carolina, South Carolina, Ohio, Texas, Kansas, Iowa and Maine, according to NPR. Before the vote, Republicans held 53 seats.
The gains reached past the usual battlegrounds. In Kentucky, Democrats won a Lexington-area House district that President Trump carried with 57 per cent of the vote in 2024, NPR reported. Democrats also won three of Iowa's four House seats, CBS News reported.
Congress before and after the vote, with the 1974 comparison
| Chamber | Before the election | After the election | Change |
|---|---|---|---|
| House, 2026 | R 218, D 214, 1 independent, 2 vacant | D 236, R 146, 53 uncalled (NBC, 12:39 p.m. ET, 4 Nov) | Control called for Democrats |
| Senate, 2026 | R 53, D 45, 2 independents | D 54 (with independents), R 44, 2 uncalled | Seven seats flipped to Democrats |
| House, 1974 | D 243, R 192 | D 291, R 144 | D +48 between the two Congresses |
| Senate, 1974 | D 56, R 42 | D 60, R 37 | D +4 |
The 2026 "before" figures are the Clerk of the House's and the Senate's current counts. The 1974 rows compare the opening of the 93rd and 94th Congresses in the House History Office's party divisions table and the Senate Historical Office's equivalent. The 1974 House gain is often given as 49 seats. The opening-day table shows 48.
What divided government means for policy
Mr. Trump keeps his veto, and Democrats are far short of the two-thirds majorities in both chambers needed to override one. He set out his approach on election night. "After a couple of months of vetoes, they'll call and they'll say, 'How do we get this stuff done?' And we'll work together," he told Fox News, CBS News reported. He also said he thought the parties could work together on immigration.
That points to fewer large laws. A tax bill or a change to trade law now needs a Democratic Congress and a Republican President to agree. The tariffs of Mr. Trump's second term were imposed by executive action rather than written into new laws, so a bill to roll them back would face the same veto. "The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook," Stephen Brown of Capital Economics wrote to clients, citing the veto and the lack of a filibuster-proof Senate majority.
What does change is the Senate's role on nominees. With a Democratic majority, Cabinet picks and judges will need some Democratic support from January, NPR reported. Committee investigations of the administration will also start in both chambers.
Republican leaders defended their record. "Senate Republicans have put up a strong record of accomplishment that's created safer streets, more money in Americans' pockets, and new opportunities for families and businesses to get ahead," Senate Majority Leader John Thune wrote on X. Vice President JD Vance offered a different explanation. "The reason we lost is the war," he wrote, referring to the conflict with Iran.
How markets moved
Stocks rallied on Wednesday. At 12:30 p.m., the Dow Jones Industrial Average was up 1,490 points, or 2.9 per cent, at 53,276.83, the S&P 500 was up 1.8 per cent at 7,704.01 and the Nasdaq Composite was up 2.0 per cent at 25,875.74, Yahoo Finance reported. The S&P 500 had closed at 7,568.92 on Tuesday, according to the St. Louis Fed. CBS News reported a similar move at the open. Trading had not closed at the time of writing.
Analysts quoted by CBS framed the move around gridlock. "We do not expect sweeping policy changes," the Wells Fargo Investment Institute wrote. Our own count found that the S&P 500 rose in the 12 months after 18 of the 19 midterms since 1950. In the year after the 1974 midterms, it gained 25.6 per cent. That is history, not a forecast.
Prices and the vote
Voters said the cost of living drove their choices. In AP VoteCast, about 80 per cent of voters said inflation had caused their household severe or moderate hardship, and more than 80 per cent said they were concerned about the cost of gas, groceries, utilities and health care, Forbes reported.
The official data show why. Consumer prices rose 3.7 per cent in the 12 months to September, the Bureau of Labor Statistics said on 14 October. The energy index rose 20.4 per cent and gasoline 34.2 per cent, while prices excluding food and energy rose 2.6 per cent. We compared those figures with prices before the 2022 midterms on Monday. The October report comes out on 10 November.
Energy prices are tied to the conflict with Iran. U.S. forces struck Iranian nuclear sites in June 2025. Joint U.S. and Israeli strikes on Iran began on 28 February this year, starting a wider war. A ceasefire announced on 8 April ended the main fighting. Disruption to shipping through the Strait of Hormuz has kept global oil prices 60 to 70 per cent above their pre-war level, according to CBS News. Mr. Trump said on election night that the war and its effect on energy prices were likely a drag on his party. About 60 per cent of voters told AP VoteCast that attacking Iran was the wrong decision, Forbes reported.
The 11 December deadline
The new majorities take over on 3 January. The deadline that matters first falls before then. The stopgap law signed on 2 September funds agencies covered by the 12 regular appropriations bills through 11 December, according to the Congressional Research Service. Without another law, a funding gap begins on 12 December. The Export-Import Bank's charter runs out on 31 December.
The outgoing Congress, still led by Republicans, has to act. The incentives have moved since Tuesday. Republicans could settle the bills while they still hold both gavels. Democrats could prefer a short stopgap and write the full-year bills themselves after 3 January. Any version still needs the President's signature. After Democrats won the House in 2018, a 35-day partial shutdown began in late December and ran into the new Congress.
What to watch
Four dates frame the next two months. The October inflation report arrives on 10 November. Alaska and Mississippi may take longer to count. Government funding expires after 11 December, and the new Congress is sworn in on 3 January. Markets can price a split government. A lapse in funding would be harder to price.
The House tally is from NBC News's Decision Desk results page, checked at 12:39 p.m. ET on 4 November 2026. The AP calls of House and Senate control, the seven Senate flips, the Kentucky district and the statements by Rep. Hakeem Jeffries, Sen. John Thune and President Trump's "Mr. Veto" remark are from NPR's report updated at 1:52 a.m. ET on 4 November, based on its tally of AP calls. The 54 to 44 Senate count and uncalled Alaska and Mississippi races, and the AP VoteCast figures, are from Forbes's live report updated at 11:10 a.m. ET on 4 November. Mr. Trump's Fox News remarks, the Vice President's post, the Iowa House results and the oil price comparison are from CBS News's live coverage of 4 November. The 8 April ceasefire is from contemporaneous wire reports. Midday market levels are from Yahoo Finance's live coverage (updated 12:30 p.m. ET, 4 November). The Capital Economics and Wells Fargo Investment Institute quotes are from CBS News MoneyWatch (4 November). The 3 November S&P 500 close is from the Federal Reserve Bank of St. Louis FRED series SP500. Pre-election House figures are from the Clerk of the House on 4 November 2026. 1974 House figures are from the House History Office's party divisions table and 1974 Senate figures from the Senate Historical Office's party division page. Consumer price figures are from the Bureau of Labor Statistics release of 14 October 2026. The stopgap law and its 11 December expiry are from Congressional Research Service report R49353. The analysis is our own.
Topics marketsmidterm electionselection 2026Congressgovernment fundingcontinuing resolutionstock marketinflationconsumer price index
