Democrats Have Won Control of Congress. What Happens Next?

— Democrats have won control of Congress. So what are their plans? We'll get into what's at the top of their agenda. Plus, the world's richest man invested more than $400 million in Republicans and lost. — Democrats have already said they plan on looking into Musk once they have that power to investigate and to get into his business. And so he's definitely going to be on the docket along with President Trump. — And a post-election rally sees the Dow rise more than 1,500 points and the magnificent seven tech companies add more than $600 billion in market cap. It's Wednesday, November 4th. I'm Alex Oseleff for The Wall Street Journal. This is the p.m. edition of What's News, the top headlines and business stories that move the world today. — Last night was a sweeping victory for Democrats. And the results rolling in today just keep adding to their numbers. As of 4 p.m., House Democrats had locked up 237 seats. House Democratic Leader Hakeem Jeffries predicts that his party will win at least 255, which would be the biggest House majority for Democrats since early in the Obama administration. In the Senate, Democrats have won 54 seats. Mississippi is still too close to call. And in Alaska, we may not get the final result for weeks because of a late deadline for absentee ballots. Republicans have begun processing their loss and pointing fingers. In a lengthy post on X this morning, Vice President J.D. Vance, a top contender for the 2028 presidential nomination, said Republicans lost because of the Iran war. He wrote, quote, Trump also blamed the Iran war for Republicans' losses, but he said it was something the U.S. had to do. — I mean, well, you have no choice. I mean, I thought the oil would go up a lot more, and I did it on that basis. You have no choice. You have to do it. You can't let Iran have a nuclear weapon or everything that you see here someday might not exist. And after voters' turn against the GOP, House Speaker Mike Johnson said he wouldn't run for minority leader in the new Congress. Top candidates for that role include Representatives Jim Jordan of Ohio and Steve Scalise of Louisiana. While Republicans reckon with their losses, Democrats have momentum for their policy agenda. For more on what this is likely to entail, I'm joined now by reporter Rich Rubin in Washington. Rich, Americans voted out Republicans because they're angry about the economy, inflation, high gas prices, the war with Iran. How do you expect that to show up in Democrats' legislative agenda when they're in charge of Congress come January? What are their top priorities? — Some of those issues about costs are going to be front and center. So when you think about things like health insurance costs and electricity costs and gas prices to the extent that they can legislate on it and tariffs, all of those are going to be things that Democrats are going to be focused on. What you can actually do, it's a tricky thing, right? Because the things that are driving the gas prices in particular is the war in Iran, which is difficult for Democrats to stop on their own. True, but they're going to try. Here's what Senate Minority Leader Chuck Schumer said today at a press conference. We are going to end the war. We have some Republicans already who have joined us in ending the war. And the founding fathers had the power of the purse as one of the ways of deterring a president. Who does war without the consent of the American people. — It's going to be a messaging challenge for Democrats to talk about the things they're doing, even if the things that they're doing don't necessarily become law or have immediate effects on prices. — We're going to dig more into a lot of those things in just a moment. But let's start with the leadership of some of these powerful committees in the House and the Senate. Do we have a sense of who is going to be in charge of some of those? — In a lot of cases, you'll just see familiar faces from a couple of years ago, because Democrats were in charge of the Senate right through 2020. 2024. The Senate Finance Committee will be Ron Wyden. You'll see Elizabeth Warren heading up the Banking Committee. You'll also see Patty Murray probably taking over appropriations again. On the House side is Robert Garcia, who's going to be running the Oversight Committee, most likely. And so that's the one that's going to be doing a lot of subpoena work on getting documents out of the administration and holding hearings and all the accountability stuff that they talked about during the campaign. — Yeah, the House Minority Leader and the likely next speaker, Hakeem Jeffries, told NBC's Today show that Congress has a responsibility to serve as a check on the executive branch. — And we will undertake that responsibility in a way that is consistent with the Constitution. Follow the facts and apply the law. — And Robert Garcia, the Californian Democrat who you just referred to, posted on X last night to quote, lawyer up. So what investigations are you expecting? — You've got a few different buckets. One is things that the president has done, the White House ballroom and all the various construction projects around Washington. His cryptocurrency and donations that they've received. Other Trump family activities and business dealings, Trump's own stock trading. So there's a number of things in that sort of presidential bucket that they might look at. Then you've got a number of things in the sort of administration activities, what the IRS has done on tax enforcement, lots of questions about health and human services and vaccines. You may also see attempts to impeach cabinet officials, particularly Secretary Hegseth. And then I think there's a number of things that I think you'll see also investigations into private individuals. Elon Musk and the Starlink situation in Ukraine or what he did with Doge and that whole era, what health insurance companies and pharmaceutical companies are doing, some of the sort of more traditional corporate investigations. And I think one thing to watch is how quickly they escalate some of these fights, knowing that they've got a limited window of two years in this Congress. And they also have a pretty busy 2028 campaign season that'll be here before you know it. So I think you would expect a fair amount of that activity to happen as soon as they can get it going in early 2027. One thing that Democrats don't have, at least right now, is a filibuster-proof majority in the Senate. Is that going to impede their ability to pass all of the legislation they want? It will limit it. So if they end up at 55 or 56, they do have the route of trying to peel off a few Republicans to get to 60 and get measures onto the president's desk. They also can use the reconciliation procedure. They can use the reconciliation procedure to get to 60 and get measures on to the president's desk. They also can use the reconciliation procedure to get measures on to the president's desk. They also can use the that we've seen both parties use over time for fiscal measures. So things like reversing pieces of last year's tax and spending law, the one big beautiful bill, whether that's raising some taxes, repealing some of the Medicaid cuts, that kind of thing. They could do that with a simple majority and send it to Trump's desk for what would presumably be a veto. And the key thing on that is they have some ability to craft a reconciliation bill that doesn't have to satisfy everyone. And that gives them a lot more freedom both to do something more liberal or to do something as less liberal and let the most progressive members of the Democratic caucus vote against it. So that's a dynamic that I think they'll probably have to process in the coming days and weeks and try to figure out where the center of gravity is and how they want to pursue it. Lots to keep an eye on even ahead of January. Rich Rubin, thank you so much. Sure. Thanks for having me. Coming up, why the changing winds in Congress are boosting U.S. stocks. More after the break. In some ways, no one was delivered a more stunning blow by last night's election results than Elon Musk. The world's richest man had poured more than $440 million into races to support Republican candidates, only to have Democrats win huge majorities. Journal columnist Tim Higgins says Musk has a lot to be concerned about. He said, with Democrats in control of Congress. One of the things that's top of mind to a lot of Democrats is just the role that Musk played in those early days of the Trump administration. Remember, he was the head of Doge, where he spent the early part of 2025 looking for spending to cut. And he did it in a way that was seen by some critics is pretty brutal. Another spot that I would anticipate Musk to face a lot of scrutiny is the role he has as the head of state. And I think that's a really important part of the SpaceX and its satellite program called Starlink. And the position that company plays in geopolitical issues in particular, there's the suggestion that Musk has limited Ukraine's ability to use that satellite network in its battles with Russia and a lot of questions about the power that Musk has in these roles. Tim says that congressional scrutiny of Musk could pose a risk for SpaceX and Tesla too. This is a pivotal moment for Musk and his companies. SpaceX and Tesla are considering a potential merger. SpaceX is moving greatly into AI and there's this huge race among the biggest tech players to dominate in the AI space. If he's taking his eye off the ball, that's not good for investors. That's not good for his companies. And Musk has a history in politics of getting very distracted. Investors seem to agree. Tesla's stock fell 3.4 percent today, while SpaceX's stock fell 3.8 percent. Meanwhile, on X, Musk posted that his, quote, election-interfering space lasers didn't work this time. On Wall Street, Democrats' victory sent stocks surging. Investors seem to be betting on a more predictable economy in the final years of Trump's term, as a president who has muscled around major companies and trading partners now faces a congressional check on his power to shape the economy. The Dow jumped 1,569 points, or 3 percent, its biggest gain since early April 2025. when President Trump paused plans to impose sweeping global tariffs. The Nasdaq and S&P both rose around 1.5%, while oil sank almost 9% to under $95 a barrel. Journal Markets reporter Jack Pitcher says that some of the spring in investors' step today comes from the relief that the midterms are over, and that some of the worst-case scenarios didn't come to pass. Things like if you saw the president deny the election results or push back or create something chaotic, and instead you saw the president come out this morning and say that he accepted the results, and Vice President J.D. Vance put out a post on X talking about why the Republicans just lost in the midterms and seeming to sort of blame that on the Iran war. Right after that post came out, oil prices dropped further. There's definitely investors starting to price in the idea that the U.S. might want to de-escalate the Iran war, which would be good for oil prices and good for stocks and risk assets more broadly. But today, there were some interesting patterns in one huge chunk of the market, AI. Why? In last night's election, voters roundly rejected data centers. That threatens to slow new construction. And Jack says that actually prompted big gains today for AI hyperscaler companies like Amazon and Microsoft. There's optimism that this could actually benefit the established players, like Microsoft, Amazon. Meta and Alphabet. These are the companies that already have a lot of data centers. They might be able to charge higher rates and have higher profits. There's also been fears about the really aggressive spending plans of these companies that they plan to finance with debt. There's this idea that there could be more of a slowdown imposed by local governments and regulations. That would prevent some of the biggest companies from maybe borrowing as aggressively as they previously planned to. I think that helps some of investors. There's fears about them levering up too fast and growing riskier. But across the AI trade, we are seeing some companies getting hurt. Chip stocks are down pretty broadly today. Some of the construction companies tied to the data center build out. Essentially anything supplying parts, supplying labor, that's been hit as people price in expectations that data center construction may slow down. In earnings, McDonald's reported higher profit and revenue in the latest, with a net income of about $2.5 billion. Much of its international business was solid, while sales were sluggish in the U.S. Kraft Heinz lifted its sales outlook for the year, saying its turnaround plan for its U.S. business is on track. The company also said it plans to raise prices next year because of its own cost pressures. And heads up that we dropped a special bonus episode earlier today. In What's News in Earnings, we look at how U.S. oil refiners are minting money from a global supply crunch caused by war. That's in your What's News feed now. And that's What's News for this Wednesday afternoon. Today's show was produced by Anthony Bansi and Danny Lewis, with supervising producer Tali Arbel. I'm Alex Oselev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.