US midterm elections: How a Democratic 'blue wave' reshapes global policy

Democrats' midterm election victories are reshaping US foreign policy, with global implications for the Iran conflict, trade negotiations, and aid to Ukraine, as President Donald Trump loses control of Congress. The results may reduce the likelihood of a full-scale US assault on Iran, as voters weary of the conflict and high fuel prices push Trump toward a peace deal, though Tehran could interpret the outcome as weakness and escalate militarily. A Democrat-controlled Congress also threatens increased scrutiny of Israel's military operations and potential challenges to US military aid, while oil prices dropped on bets that peace talks could revive. Democrats are poised to propose new Ukraine aid, though a Trump veto and Patriot missile shortages limit immediate impact, and trade talks with India and China may shift as Trump's tariff authority faces congressional challenges. Asian chip and AI stocks fell on concerns that Democratic oversight could slow data centre buildout, while European digital services tax disputes remain unresolved.