US midterms: What a Democratic Congress means for Europe and markets

Democrats won control of both chambers of the US Congress in the midterm elections, delivering a major defeat to President Donald Trump. The result raises questions about the future of US trade policy and support for Ukraine. Democrats gained 25 House seats and seven Senate seats, including in Texas, Ohio, Kansas, and Maine. High prices drove the vote, with two-thirds of voters saying Trump's tariffs hurt the economy. Trump said he would accept the results but vowed to use his veto power to block Democratic legislation. Trump's tariffs likely remain, as they now operate under Section 301 of US trade law, bypassing Congress. Democrats can hold hearings but cannot easily revoke this authority. On Ukraine, Democrats may approve new funding, but the White House could withhold spending, so Europeans should treat earmarked funds as intent, not commitment. Markets reacted calmly, with the euro rising and gold gaining, while investors generally favor gridlock for fewer policy surprises.