Taking advantage of the wave of voters’ anxiety, the Democrats swept the Congress. The anger of the people over the cost of living and the Iran war led to a fierce criticism of President Donald Trump and his party just two years after his strong return to the White House.
In the House of Representatives, the Democrats have won at least 228 seats, far exceeding the 218 seats needed to obtain a majority. NBC News predicts that the Democrats may eventually gain 258 seats, while the Republicans will have 177 seats. The Democrats will lead by 81 seats.
In the Senate, the Democrats have already won 54 seats, while the Republicans have only 44 seats. The seats in Alaska and Mississippi have not yet been determined.
After the results were announced, Trump also sent congratulations to the Democrats, which was quite different from his previous rebellious attitude. Some market interpretations suggest that “The King of the Kingdom is releasing a friendly attitude to prevent being over-cleared.”
Vice President Vance later admitted that the Republican Party’s failure was due to the Iran war. It is currently reported that Vance is seeking to establish a “new right-wing alliance” with voters who are disappointed with Trump before the 2028 election cycle. After the Republican Party’s midterm election defeat, Vance released a long article on Wednesday morning local time and held different positions from Trump on issues such as foreign policy and US-Israel relations.
In addition to Vance’s “defection,” both the Democratic and Republican parties are planning to impeach Defense Secretary Hergeseth, who may become the first “scapegoat.”
Several Republican officials privately believe that Hergeseth overestimated the prospects of the war when promoting the US military action against Iran, but failed to fully consider the long-term conflict and its political and economic consequences. With the Democrats gaining control of both the House and the Senate, the calls for investigation and even impeachment of Hergeseth are increasing. However, Trump still clearly stated that there is no plan to fire Hergeseth on that day.
The voices of Arab countries also turned against Trump collectively after the midterm elections. According to Lebanese TV station Al Jadeed, Arab sources reported that the Gulf countries firmly oppose another war by the US against Iran, fearing regional chaos; considering the unpredictable outcome of the new war, all parties tend to make cautious decisions.
Now, Trump has well demonstrated the reality of “when the wall collapses, everyone pushes it down.” Some sources indicate that the US-Iran negotiations have made significant progress, and more clear progress is expected on Friday. Has the King of the Kingdom already resigned and begun to make up for the situation to avoid being over-cleared? We will soon know the answer.
The comprehensive victory of the Democratic Party in the midterm elections has given the market a substantive signal of the cooling down of the US-Iran situation. Crude oil prices have further dropped, with WTI falling from around 93 to the current 87; gold has strongly rebounded, recovering the integer levels of 4000 and 4100, currently at 4130. Even AI technology stocks have shown clear rebound signs. Although the Democrats may increase regulatory efforts, the cooling down of the US-Iran situation will lead to a decline in interest rate expectations, and the 10-year US Treasury yield has fallen back to 4.83%. The decline in interest rates is more favorable for AI financing, and a decrease in financing costs will become a real benefit for technology stocks. Therefore, the Nasdaq 100 index has rebounded from the low of 27，500 to around 28，200， and the overnight high reached above 28，800.