Editor's Note: Apologies for missing Tuesday's (November 3) post of Money Daily. We suffered a breakdown of a key piece of equipment (range extender) which put us out of business for the day. It's now working, but we are actively pursuing a permanent replacement. This was probably the first post we've missed in 10 years. - Fearless Rick
Moments before the opening bell on Wednesday, stock futures were rocketing higher, with Dow futures up more than 1,100 points, the S&P ahead by 90, and the NASDAQ not quite as delighted with Tuesday's midterms results, up just about 100 points.
Tuesday's nationwide proxy referendum on President Trump's policies produced a coast-to-coast rout by the Democrats, repudiating Trump's tariffs, handling of the economy and inflation, and the war against Iran as the key issues.
The U.S. Senate completely flipped, with the makeup, when the new Senate is sworn in the first week of January, consisting of 54 Democrats and 44 Republicans, with two independents, setting the stage for possible impeachment hearings in the House, which will be controlled by the Democrats, currently holding a confirmed 228 seats, well more than the minimum for a majority (218). Democrats will control the executive branch in at least 28 states, with major victories in Georgia, Texas, Iowa, Minnesota, Nevada, Ohio, and elsewhere. Democrats lead in Kansas and Alaska, which, as of this writing, have not been officially declared.
The election results clearly demonstrate that the electorate across the country was unhappy with Republican leadership and voted for a change. While Democrats may or may not remedy the current ills, the evidence points to massive dissatisfaction with Trump's agenda and a Republican-controlled congress acting as lapdogs to the president, doing little to nothing to curb his extreme policies.
Trump has already made the claim that he and his radical policies were not the deciding factor in the "blue wave" that occurred on Tuesday, claiming that had he been on the ballot, Republicans would have won in a landslide. Sorry, but he's dead wrong on that note. It was exactly his policies that produced a Democrat landslide, and, as usual, the once-populist president turned abject loser refuses to accept reality.
This is the result when a president fails to keep his campaign promises. In the run-up to his 2024 electoral victory, Trump promised lower inflation, lower gas prices, cutting government spending, closing the borders, removal of illegal immigrants, release of the Epstein files, no new wars, and an end to the war in Ukraine. On nearly all of those issues, he's failed miserably. Only on closing the borders and deportation of illegals has he been somewhat true to his word. While the borders have been almost completely closed to foreigners, his ICE squads have not deported nearly the numbers Trump promised on the campaign trail. Roughly just ove a million illegals have been deported and estimates are that anywhere from 300,000 to 1.5 million illegals have "self-deported,", i.e., left on their own will. There are still between 20 and 30 million illegal immigrants in the United States, so ICE, though they've managed to deport many known criminals and gang members, has barely scratched the surface.
The Ukraine conflict has dragged on for the nearly two years of Trump's presidency with no end in sight. Trump, with prodding by Israel, started a conflict with Iran that has caused a major disruption in oil, natural gas, and other critical elements in the energy and agriculture sectors, raised crude oil prices above $100/barrel worldwide and gas at the pump remains at a national average above $4.00/gallon. Inflation has not been tamed. Food prices have increased during Trump's presidency and he's done nothing to help consumers make ends meet. Affordability in house remains a key issue. Most Americans are unable to purchase an existing or new home because prices are at extremes and interest rates are on the rise.
On spending, the president promoted and approved a fiscal year 2025 deficit of about $1.85 trillion, equal to roughly 6.3% of GDP, with his “One Big, Beautiful Bill" in 2025, which extended the overspending by congress at record levels. For the U.S. government fiscal year 2026, when the final figures are computed (ended September 30, 2026), the deficit will be roughly another $1.8 trillion. The president's highly-touted DOGE initiative, headed by Elon Musk, turned into a grand fiasco, saving taxpayers less than $20 billion and resulting in a negligible reduction in the federal workforce.
Perhaps the most overlooked and under-reported issue on the minds of voters were the Epstein files, some of which were revealed, mostly with heavy redactions, and the entire investigation has gone nowhere and has been abandoned. Trump himself is identified repeatedly in the Epstein files. A New York Times review found that Trump is mentioned more than 38,000 times in the redacted Epstein-related files released publicly by the Justice Department as of early 2026, with his name appearing in over 5,300 individual documents examined by the newspaper. This alone, and Trump's stone-walling on the issue, was enough to keep many MAGA loyalists away from the polls or switch their votes to Democrat candidates. The hubris and dishonesty displayed by President Trump regarding the Epstein files and other dodgy practices - linking his tweets or "Truths" to insder trading on oil futures and in the stock market - were, beneath the surface, a key element of Tuesday's tsunami for the blue team.
What happens next in the early going will be a great deal of finger-pointing over who was responsible for the backlash against Republicans and most fingers will point directly at President Trump, and that's just on the Republican side, which faces the unpleasant prospect of being in the minority for the next two years and possibly longer. Democrats now have new faces that could end up as presidential candidates in 2028. Forget the old names of Kamala Harris or California Governor Gavin Newsom. Rising stars like Georgia Senator John Ossoff or North Carolina's Roy Cooper will be getting more attention as the presidential race evolves. Republicans are stuck with unattractive choices between Marco Rubio and the distant Vice President, J.D. Vance.
In order to reclaim the White House, Trump will need to actually o work for the American people by cutting spending, ending the conflicts in Ukraine and Iran, and getting inflation under control control, though he’s unlikely to initiate action on those issues, having instead to be pushed to make the right decisions with impeachment hanging over his head, a tactic the Democrats will no doubt use as a strong negotiating tool to tone down White House policies and Executive Orders.
As far as Wall Street is concerned, Tuesday's election landslide by Democrats puts politics on a back burner, for now, with the consensus understanding that the federal government will be gridlocked for at least the next two years. Such a condition allows businesses to plan and operate without much thought towards government regulations, tax changes, and new legislation. Gridlock in Washington is generally seen as a panacea for big business, allowing executives to make decisions devoid of political influence, though it may not be so cut and dry, as Democrats may have enough votes from their own party and defectors from the other side to override presidential vetos. In that regard, there may not be much in the way of a deadlocked government, but a runaway, chaotic rush by Democrats to overturn Trump's policies and replace them with their own, whatever those might turn out to be.
One possible case is a lame duck president with little power to pursue the agendas he's built up during the first two years of his term in office, though the rhetoric from the Democrats seems hardly capable of constraining themselves from complete overthrow of the status quo. Their huge victory on Tuesday may be seen as a mandate to throw the current government overboard, lean toward impeachment or at least the threat of it and begin to enact legislation that reverses Trump-inspired executive orders and policies.
It remains to be seen to what extent Democrats will go to ensure their victory is not wasted. The media will be in a frenzy from now until the new congress is sworn in in January, 2027, trying to flesh out details of the new regime's plans. It will be sometime in the first quarter of next year before most of what's to come will be realized and the effects will last through the next few years. There is a distinct possibility that tax hikes on individuals and corporations and more stringent regulations on businesses will be part of a new package put together by Democrat leadership. What they'll probably be saying is that individual rights will be at the forefront of their agenda, but the reality is likely to be less so. Democrats will likely push to end the wars, but that's going to be a hard sell in many quarters. At best, Americans can hope that the Democrats won't screw things up any more than the Republicans already have.
The country is going to be beset with a uni-party that will do little to cut spending and lower the deficit, replace aging infrastructure or promote the general welfare of the population. In other words, change will not be directed at the most pressing issues because they're generally unfixable at this point. Whether the country is led by Democrats or Republicans matters little. They all sleep in the same bed of special interests and the people be damned.
The best outcome from this for President Trump is that he doesn't have to come up with the $5,000 he promised in the event of a Republican win. Being that it wouldn't be his money doled out, it's likely he simply didn't care.
For now, until the end of the year, it may be safe to dabble in stocks, but there certainly seems to be a wheelbarrow full of problems ahead and neither party is likely to fix the broken system.
At the Close, Tuesday, November 3, 2026:
Dow: 51,786.72, -197.26 (-0.38%)
NASDAQ: 25,372.01, +207.65 (+0.83%)
S&P 500: 7,568.92, +27.52 (+0.36%)
NYSE Composite: 24,307.04, -65.03 (-0.27%)
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