WASHINGTON: The opposition Democratic Party have regained control of the lower US House of Representatives from President Donald Trump's Republicans in the midterm elections, powered by a suburban revolt that threatens what's left of the president's governing agenda.
But the GOP added to its Senate edge and prevailed in some key races for governor Tuesday, beating back the potential of big Democratic gains across the board. The “blue wave” that some had feared from Election Day never fully materialised.
US 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 had gained more than 1% by late morning while the broad-based S&P 500 index was up 1.3%. The dollar was slightly weaker against a basket of currencies.
A Democrat-controlled House will hamper Trump's pro-business agenda and could lead to uncertainty about his administration, but corporate tax cuts and deregulation measures that have played a large hand in the US stock market's rally since the 2016 election are likely to remain untouched.
"With the Democrats taking over the House we will now have to see what gridlock in Congress means for policy. As for the market impact, a split Congress has historically been bullish for equities and we expect to see the same pattern again," said Torsten Slok, chief international economist for Deutsche Bank.
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.
The mixed verdict in the first nationwide election of Trump's presidency showed the limits of his hard-line immigration rhetoric in America's evolving political landscape.
College-educated voters in the suburbs rejected his warnings of a migrant "invasion". But blue-collar voters and rural America embraced his aggressive talk and stances.
The president himself focused on positives as Republicans lost control of the House but made Senate gains.
Trump tweeted as results came in on what he called his very big win: "Tremendous success tonight. Thank you to all!"
The new Democratic House majority will end Republican dominance in Washington for the final two years of Trump's first term with major questions looming about health care, immigration and government spending.
The election focus in America now turns to 2020, the year of the next presidential voted.
House Democratic leader Nancy Pelosi of California, who would be in line to become the next speaker when Congress convenes in January, spoke of "a new day in America." Trump, in a tweet, said that "in all fairness" Pelosi "deserves" to return to her former role as speaker - a position always held by the majority party in the House - despite some rumblings in her party. "She has earned this great honor!"
But the Democrats' edge is narrow. With 218 seats needed for a majority in the 435-member Houses, Democrats have won 220 and the Republicans 193, with winners undetermined in 22 races.
The president's party will maintain control of the executive branch of the government, in addition to the Senate. But Democrats suddenly have a foothold that gives them subpoena power to probe deep into Trump's personal and professional missteps - and his long-withheld tax returns.
Early Wednesday, Trump warned Democrats against using their new majority to investigate his administration.
"If the Democrats think they are going to waste Taxpayer Money investigating us at the House level," Trump tweeted, "then we will likewise be forced to consider investigating them for all of the leaks of Classified Information, and much else, at the Senate level. Two can play that game!" It wasn't clear what "leaks" he was referring to.
US House Minority Leader Nancy Pelosi celebrates the Democrats winning a majority in the US House of Representatives with House Minority Whip Steny Hoyer (left), her grandson Paul (third right) and other Democratic Congressional Campaign Committee (DCCC) members. (Reuters photo)
It could have been a much bigger night for Democrats, who suffered stinging losses in Ohio and in Florida, where Trump-backed Republican Ron DeSantis ended Democrat Andrew Gillum's bid to become the state's first African-American governor.
The elections also exposed an extraordinary political realignment in an electorate defined by race, gender, and education that could shape US politics for years to come.
The GOP's successes were fuelled by a coalition that's decidedly older, whiter, more male and less likely to have college degrees. Democrats relied more upon women, people of colour, young people and college graduates.
Record diversity on the ballot may have helped drive turnout.
Voters were on track to send at least 99 women to the House, shattering the record of 84 now. The House was also getting its first two Muslim women, Massachusetts elected its first black congresswoman, and Tennessee got its first female senator.
Three candidates had hoped to become their states' first African-American governors, although just one - Georgia Democrat Stacey Abrams - was still in the running.
Overall, women voted considerably more in favour of congressional Democratic candidates - with fewer than 4 in 10 voting for Republicans, according to VoteCast, a nationwide survey of more than 115,000 voters and about 20,000 non-voters - conducted by NORC at the University of Chicago.
In suburban areas where key House races were decided, female voters skewed significantly toward Democrats by a nearly 10-point margin.
Democrats celebrated a handful of victories in their "blue wall" Midwestern states, electing or re-electing governors in Michigan, Pennsylvania, Minnesota and in Wisconsin, where Scott Walker was defeated by the state's education chief, Tony Evers.
The road to a House majority ran through two dozen suburban districts that Hillary Clinton won in 2016. Democrats flipped seats in suburban districts outside of Washington, Philadelphia, Miami, Chicago and Denver. Democrats also reclaimed a handful of blue-collar districts carried by both former President Barack Obama and Trump.
The results were more mixed deeper into Trump country.
In Kansas, Democrat Sharice Davids beat a GOP incumbent to become the first gay Native American woman elected to the House. But in Kentucky, one of the top Democratic recruits, retired Marine fighter pilot Amy McGrath, lost her bid to oust to three-term Rep Andy Barr.
History was working against the president in both the House and the Senate. A president's party has traditionally suffered deep losses in his first midterm election, and 2002 was the only midterm election in the past three decades when the party holding the White House gained Senate seats.
Democrats' dreams of the Senate majority, always unlikely, were shattered after losses in top Senate battlegrounds: Indiana, Missouri, Tennessee, North Dakota and Texas.
Some hurt worse than others.
In Texas, Senator Ted Cruz staved off a tough challenge from Democrat 'Beto' O'Rourke, whose record-smashing fundraising and celebrity have set off buzz he could be a credible 2020 White House contender.
Nearly 40% of voters cast their ballots to express opposition to the president, according to VoteCast, while one-in-four said they voted to express support for Trump.
Overall, 6 in 10 voters said the country was headed in the wrong direction, but roughly that same number described the national economy as excellent or good. Some 25% described health care and immigration as the most important issues in the election.
Nearly two-thirds said Trump was a reason for their vote.
The president bet big on a xenophobic closing message, warning of an immigrant "invasion" that promised to spread violent crime and drugs across the nation. Several television networks, including the president's favourite, Fox News Channel, yanked a Trump campaign advertisement off the air on the eve of the election, determining that its portrayal of a murderous immigrant went too far.
One of Trump's most vocal defenders on immigration, Kansas Secretary of State Kris Kobach, lost his bid for governor.
Kobach had built a national profile as an advocate of tough immigration policies and strict voter photo ID laws. He served as vice chairman of Trump's now-defunct commission on voter fraud.
The president found partial success despite his current job approval, set at 40% by Gallup, the lowest at this point of any first-term president in the modern era. Both Barack Obama's and Bill Clinton's numbers were five percentage points higher, and both suffered major midterm losses of 63 and 54 House seats, respectively.
Several ambitious Democrats easily won re-election, including presidential prospects Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Kirsten Gillibrand of New York. Some others played outsized roles in their parties' campaigns, though not as candidates, and were reluctant to telegraph their 2020 intentions before the 2018 fight was decided. They included New Jersey Sen Cory Booker, California Sen Kamala Harris, former New York City mayor Michael Bloomberg and former Vice President Joe Biden.