Factbox - Can the new U.S. attorney general shut down the Mueller probe?
The Democrats fell short of a tidal wave of voter support that would have won them control of both chambers of Congress. But in the 435-member House, the party was headed for a gain of about 30 seats, beyond the 23 they needed to claim their first majority in eight years. A Senate majority would have allowed Democrats to apply even firmer brakes on Trump's policy agenda and given them the ability to block any future Supreme Court nominees.
House Democrats could force Trump to scale back his legislative ambitions, possibly dooming his promises to fund a border wall with Mexico and pass a second major tax-cut package. Legislators could also demand more transparency from Trump as he negotiates new trade deals with Japan and the European Union. "Today is more than about Democrats and Republicans; it's about restoring the Constitution's checks and balances to the Trump administration," Pelosi told supporters at a victory party on Tuesday night. Trump also mocked Republican candidates who had refused to back his policies and ultimately lost their races, such as U.S. Representative Barbara Comstock of Virginia.
GRIDLOCK? U.S. stocks jumped on Wednesday as investors, who often favour Washington gridlock because it preserves the status quo and reduces uncertainty, bought back into a market that had its worst month in seven years in October. The Dow Jones Industrial Average .DJI ended up 2.13 percent on Wednesday, while the broad-based S&P 500 index .SPX rose 2.12 percent. The dollar index .DXY, a measure of the greenback against a basket of currencies, was slightly weaker.
A Democratic-controlled House could hamper Trump's attempts to further his pro-business agenda, fuelling uncertainty about his administration. His corporate tax cuts and the deregulation that have played a large hand in the U.S. stock market's rally since the 2016 election, however, are likely to remain untouched. Democrats will use their new majority to reverse what they see as a hands-off approach by Republicans toward Trump's foreign policy, and push for tougher dealings with Russia, Saudi Arabia and North Korea. Foreign policy has been an area that Trump has approached in a very personal way, sometimes antagonizing allies such as Canada, while making what critics see as unduly warm overtures to traditional U.S. rivals or foes. Tom Perez, chairman of the Democratic National Committee, said Democrats could work with Republicans to produce a long-awaited bill to upgrade the nation's roads, bridges and airports. "Of course, we want to work in a bipartisan fashion. I think we can get an infrastructure bill," he said. Trump had hardened his rhetoric in recent weeks on issues that appealed to his conservative core supporters. He threw himself into the campaign, issuing warnings about a caravan of Central American migrants headed through Mexico to the U.S. border and condemnations of liberal American "mobs" he says oppose him. DEMOCRATIC PROBES Every seat in the House was up for grabs on Tuesday and opinion polls had pointed to the Democratic gains. The party with the presidency often loses House seats in midterm elections. The Republicans had an advantage in Senate races because elections were held for only 35 seats in the 100-member chamber and many of them were in states that often lean Republican. Republicans built on their slim Senate majority by several seats and ousted at least three incumbent Democrats: Joe Donnelly in Indiana, Heidi Heitkamp in North Dakota and Claire McCaskill in Missouri. In Florida, Democratic Senator Bill Nelson was trailing his Republican rival, Governor Rick Scott, by a slim margin, with the possibility of a recount looming. Republican Martha McSally was leading Democrat Kyrsten Sinema in the U.S. Senate race in Arizona with some votes still to be counted.