A Blue Wave Just Swept Congress

Democrats retake the House and Senate, making historic inroads into deep-red states. We have not hold the phone, hold the phone. The big moment we are going to project that the Senate will go to the Democrats. Democrats have now picked up enough seats to reclaim the majority they lost two years ago. We're talking about Trump, double-digit states in Iowa, in Kansas, in Ohio, in South Carolina, in Texas. All of them flipped tonight. Plus, President Trump distances himself from Republican losses, and will look at how markets are sizing up the change coming to Washington. It's Wednesday, November 4th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. From the very first results, it was clear where the night was going. It began with Democrats flipping North Carolina's Senate seat, then South Carolina's, and from there, the upsets kept on coming. We just took back Texas. In Texas, to Kansas, Iowa, to Ohio, and in Maine, totaling seven in all, and putting Democrats on pace to hold at minimum 54 seats in the Senate as vote counts continue in Alaska and Mississippi. Democrats also regained the House majority, which come January means control over the House Oversight Committee with its subpoena powers and its broad authority over government investigations. Journal deputy editor Joshua Jamerson has been helming our overnight election coverage. Josh, I know we'll have plenty to say as we hit some of the key states from last night, but just stepping back, I don't think we need to overcomplicate things because voters told us a lot of what we need to know. Which is that they wanted to give a rebuke to the direction of this administration. President Trump didn't run from that during the campaign. He asked voters, especially his supporters, the people who have carried him in office twice now, to act as though he were on the ballot. And so I think it's fair to say that they did. And when you see Democrats winning in places where they haven't won in decades, like Texas and South Carolina, it speaks to an environment that was very hard for Republicans to run away from this administration and its policies, particularly on the Iran War and affordability, the cost of living. Yeah, there was a big survey of almost 80,000 registered voters that sort of went into what we're driving people to vote and we saw that concern about the economy front and center there. And not only was the economy one of the reasons they went to the polls, almost two-thirds of participants in that survey, almost two-thirds of Americans said that they thought President Trump's policies were making it harder to get by in this economy. And so when you have that type of sentiment, it's very hard for Republican candidates to overcome it. That's what we saw in the election results. Let's look at who some of these voters were. Our Sabrina Rodriguez was in Texas overnight. That's where Democrat James Taloriko brought to a very decisive end three decades of Republican dominance in statewide elections and handily defeated Attorney General Ken Paxton. Thanks, and part Sabrina said to Latinos. Taloriko's campaign really centered on a populous message where he often talked about how the election came down to a fight between the people of Texas and the billionaire class. Part of what people credit Taloriko for as well was his focus on Latino voters who are a pivotal group of voters in Texas. He spent aggressively on Spanish language ads and traveled to parts of the state with heavy Latino populations and really emphasized to them his economic message and how he wanted to change things. So he wasn't just focusing on what would be Eric quotes Latino issues or just talking about immigration. Josh, that is one demographic group that helped put Democrats over the top but far from the only one. Yeah, I think what's really interesting about Texas is that you saw Republicans in that state launch a mid-decade redistricting effort like Republicans around the country. But what was interesting about Texas was their redistricting effort they're counted on gains that the Republican Party had made among Hispanic voters. And so when that didn't happen, it contributed not only to James Taloriko winning statewide there, but it also contributed to a sort of backfiring of their redistricting effort in the house. The other thing that's really fascinating about this mid-term election is young people seem to actually have come out and vote in ways we haven't usually seen. When you saw candidates trying to harness this sort of disenfranchised young voter, including some young men who maybe backed President Trump in 2024, you saw candidates like al-Sahead and Michigan, the Democratic Senate nominee there, merely make a concerted effort to appeal to those young voters and I think we saw it pay off. Yeah, and speaking of al-Sahead, he beat out Republican Mike Rogers in Michigan, a very key state in the Rust Belt and our Sabrina Sidiq was there and reflected on just how historic that win was. The story of the night in Michigan, of course, is Abdul al-Sahead being the first Muslim ever elected to the U.S. Senate. When he came out and addressed supporters, he was defiant and it was not just that the tears were deafening, but people had tears in their eyes. And I think one thing about Abdul al-Sahead's speech is he really hit back at President Trump and Republicans for the anti-Muslim attacks that had been such a feature of the campaign against al-Sahead. He specifically addressed President Trump, who has repeatedly mispronounced Abdul's name in his own speeches. And what al-Sahead told the President was, "I know you have trouble pronouncing my name. Come January, you can call me Senator and the crowd went wild." They went all in on one of the ugliest campaigns we've seen in our lifetimes. They might have been pointing to my name and my faith, but we all know that my name and my faith aren't the reason you can't afford your gas. Not the reason you can't afford your groceries. Not the reason you can't see a doctor. Josh, I'm sure Democrats are thrilled to have made some historic inroads in red states, but it must also come as a relief to have things back on track in some of these states that constitute the blue wall that Trump had initially flipped for Republicans back in 2016. Yeah, I think it's remarkable to see states like not just Michigan that were part of the blue wall come back into the Democratic fold, but states where Democrats in the Midwest had not done well for some time like Iowa and Kansas. It raises a really interesting question about whether Democrats can expand on their pathways to an electoral college victory in 2028. These Democrats in these states like Texas or Iowa or Kansas or in the blue wall like you mentioned in Michigan have given the party essentially a roadmap of how to claim victory in these states. And so the question is, can they carry that momentum forward in 2028 or will the results tonight be sort of a one off that was specific to the Trump administration and voters wanting to send a message about how they feel about it? I imagine in the context Ohio a pretty important one last night as well as state that Democrats has not won in some recent presidential elections and that JD Vance in his Senate campaign they're back in 2022. One handily went quite the other way last night for Sherrod Brown. That's going to be a state that, you know, it's obviously one of many that are important in a Senate election, but a crucial one if you don't want to get enough electoral votes in 2028 to get a Democrat into the Oval Office. Yeah, Ohio could be a total electoral college game changer if Democrats were able to once again be competitive there in presidential election years. Sherrod Brown has a long time history in that state. He was, I think, what Democrats consider to be a pretty strong candidate for them, somebody with high name IDs, someone who had already proven he could win in the state. The question for Democrats going forward in places like Ohio is whether that sort of special sauce that these candidates had this year can rub off on whoever the Democrat nominates in 2028. Let's talk about one more race that can maybe tell us a bit about the political move. That's Maine where our Shavon Hughes filed this Republican Senator Susan Collins has beaten back many tough challenges. The one she could not overcome the drag created by President Trump over and over voters in this state said they were fed up with President Trump and that Susan Collins had been too tepid in standing up to him. The primary factor was economic following President Trump's war with Iran voters here struggled to pay their home heating oil bills and to fill their cars with gasoline. Other factors included an immigration enforcement program whose excesses left an immigrant debt in the state as well as the Medicaid cuts contained in the one big beautiful bill. All right, Josh. So just maybe no room anymore for Republicans to really distance themselves credibly from the president. And speaking of him, President Trump got on the phone with the journal last night. I'm curious what you made of his reaction to the results, which seemed to mix on one hand some acknowledgement of voter anxieties along with some shifting of the blame. Yeah, I mean, I thought it was really interesting in that interview that he did with our colleague Josh Dossie that he said he thought he would work well with Democrats and get along with them. It did seem like the president was already sort of in some way trying to look past these results to his final two years in office. And he also gave a quote at the end, it's just the way the ball bounces sometimes. You know, usually you think of these elections as consequential impoliticians always talk about. This is the most consequential election of our lifetime. Every election is the most consequential of our lifetime. Here you have the president sort of brushing on the rug. It's just the way the ball bounces sometimes. I'm curious. some of his Republican colleagues who lost their jobs, feel about that. And how he's going to feel about it, right? And whether that note of optimism about cooperating with Democrats and Congress is really going to hold when it dawns on him what the final two years of his presidency are are going to look like. Yeah, and I do think to his point, the Democrats do have a risk here of sort of overplaying their hand because I do think voters seem to say that they were rejecting the Republican Party and the Trump administration more than they were wrapping their arms around the Democrats. The Democrats are still deeply unpopular and have some tricky terrain to navigate in the months ahead. I've been speaking to Wall Street Journal deputy editor Josh Jamerson. Josh, thank you so much. Can you get some rest now? I'll try. Good luck to yours. Thank you. Coming up, our Alex Francois will stop on to look at how markets are reacting to last night's democratic sweep because there is more going on in the world. Believe us, we've got the rest of the days news as well. Investors are starting to think about what a divided government means for markets in the economy after last night's democratic wins. And here to reflect on that, I'm joined by journal finance editor Alex Francois Alex, let's start with futures and the market trade that we've already seen in Asia and a little bit in Europe as well. What are we seeing? Well, it's a bit of a rollercoaster overnight at first. You have this pretty steep sell off in stock futures and Asian companies shares that are kind of hilted to the data center build out because this idea that what Democrats are taking over state houses in Texas and Ohio and a lot of momentum for that stuff could slow voters really voting against data centers. But overnight, you saw a big reversal and now stock futures are up, Dow decidedly in positive territory, looking like it's going to open higher. And there seem to have been a shift when President Trump gave interviews including the Wall Street Journal. You just say he's not going to contest the election, the acknowledge of the Democrats won and that he wants to work with them. And I think there is a bit of a relief that this is not going to be a dramatic contested situation. It's more of a kind of election where wherever the chips may fall in terms of the politics, the result is not in dispute. And so markets in a way have the certainty of knowing, okay, result is done. Let's move on. So we're seeing a little bit more positive momentum going into the open. Alex just going back a minute. I'm glad you brought up data centers and Ohio in particular because this is something that Ohio Senator-elect Sherrod Brown actually talked about in his victory speech last night. I do not work for data centers. I do not work for Wall Street. I work for you. I work for Ohio. And I should add, Alex, that in our voter survey that I spoke to Josh Jamerson about earlier, 56% of respondents said that data centers were either a crucial or a major factor in their picks for Congress. So this extended well beyond Ohio and we saw several towns as well in Kansas and Florida passing bands on data center construction. Turning to Capitol Hill though, we will very soon have different leadership on key committees, including those that control congressional spending and oversee the finance world. We could see more pushback on President Trump's agenda or businesses aligned to him and his family. What are you watching? A whole bunch of things. I think there are some industries to keep an eye on. Defense is one of them. We're seeing defense stocks fall a little bit this morning. That is an indication that the very big defense spending plans of the Trump administration are now going to be curtailed by Democratic Congress. And generally when you have divided government, you have less spending. So those kind of priorities, you have wind turbine companies, which President Trump hates almost nothing more than wind turbines. The shares in wind turbine companies are soaring this morning. You have Democratic governors and wind states now and just Trump maybe a little bit on his back foot about being able to stop these projects. Obviously, Trump was the crypto president. There were a bunch of important Republicans who have been voted out of office who were big advocates of the cryptocurrency industry. They're now gone. They know immediately what that means, but it certainly increases the uncertainty around those industries. A ton to watch, Alex. Thanks as always. Thank you, Luke. Meanwhile, oil prices are rising this morning as investors gauge how the midterm results could shape President Trump's approach to Iran. For oil traders, the immediate question is whether Washington pursues a diplomatic agreement with Tehran or launches another round of military strikes. Analysts are also trying to gauge Trump's approach to negotiations involving Russia and Ukraine, and a likelihood that congressional Democrats rain in Trump's foreign policy agenda. In other news, CVS Health has decided to split the company into two a decade after a near $70 billion merger that knit together insurance company, Etna, and CVS, to create a new type of healthcare giant. The breakup is planned for early 2028 with one company housing Etna and pharmacy benefit manager Kermark and the other, CVS's 9,000 retail drug stores. Health reporter Anna Wilde-Mathius says that CVS and other healthcare giants have been coming under increasing bipartisan scrutiny from federal and state-level regulators and lawmakers, which could intensify with Democrats taking majorities in the House and Senate. There's definitely been pressure on the very large integrated healthcare companies and CVS is one of the very largest United Health is of the same kind of scale. There's been a lot of scrutiny sort of from a regulatory perspective. The FTC in particular has scrutinized the pharmacy benefit business of these companies. There's a bill which is co-sponsored by Senators Al Goren and Holly that would require breakups of some of these companies, and they've been pressure from state legislatures as well. A couple of states, Tennessee and Arkansas have passed laws that aim to separate PBM and pharmacy operations in their states. Those laws have been challenged legally by CVS and others, but there definitely is pressure and it does seem to be pretty bipartisan on these big companies. The new CVS pharmacy company will also include CVS's mail order pharmacy. Their associated minute clinic providers and AI-powered consumer app, Health100. Shares of NOVO Nordisk are rising after the company boosted the outlook for its obesity and diabetes drugs, especially outside the US. The drug maker has been grappling with intensifying competition in the weight loss market, including from generics, but has managed to carve out a lead in weight loss pills, which it launched in the US earlier this year and expects to be available in more than 20 markets by next year. And if you can't get enough earnings, you're in luck, because we've got a special bonus episode of what's news in earnings coming out that'll look at how US oil refiners are minting money from a global supply crunch caused by the war. It'll be right here in your what's news feed at midday. And that's it for what's news for this Wednesday morning. Today's show was produced by Daniel Bach and Hadi Moyer, our supervising producer with Sandra Killhoff, and we had additional help today from our deputy editor, Chris Sinsley. I'm Luke Vargas, for the Wall Street Journal. We will be back tonight with a new show, and until then, thanks for listening.