Democratic turn in the US Congress exposes Trump's historic setback

According to Your Money, on Tuesday (3/11) the American electorate went to the polls in an intermediate vote, and the Democrats emerged victorious. From 2027, they will hold the majority of seats in both the House of Representatives and the Senate. For Donald Trump, the score is a fall, and the magnitude of the Republican losses is what draws the most attention.

The Democratic triumphs came in districts that, for decades, used to be Republican strongholds, where Trump's party had been strong for more than a generation. In Kansas, according to Money Times, a Democrat was elected senator for the state, something that had not happened since the Great Depression, almost a hundred years ago. In South Carolina, Trump won the state in 2024 with almost an 18-point advantage, but now the electorate blocked the name he had nominated for the Senate seat.

For Your Money, three reasons explain the discontent of those who voted for Trump: the more expensive life, the conflict with Iran and the way the president runs the government. According to InfoMoney, based on Reuters, tens of millions of Americans voted against Trump, including voters from conservative strongholds who had guaranteed his second term in 2024 and have now switched sides.

As for the markets, the main stock exchanges on the planet had a day of ups and downs on Wednesday (4/11), according to the same report. Investors have begun to consider the possibility of tougher regulations for artificial intelligence and cryptocurrencies, in addition to possible tax increases and stronger oversight, issues that gain strength when Congress changes command.

The point that worries most is the balance of forces in Washington. According to Reuters, via InfoMoney, the market sees the possibility of votes being blocked in the Legislature, with Trump on one side and Congress in the hands of the opposition on the other. Money Times points out that the Democratic victory makes it more difficult to advance the presidential agenda.

What changes for the investor

In practice, a divided government tends to reduce the speed at which economic projects advance, and this weighs on the risk reading of those who operate shares, interest rates and the dollar. The topics mentioned in the reports, such as regulation of AI and crypto and possible tax increases, are precisely those that most affect technology and digital asset sectors in the American market. There are still no concrete developments on these issues, and the election, in itself, does not allow us to predict price behavior. For the investor, the path is to monitor which projects reach Congress and how the Executive reacts, instead of reacting to the results of the polls.

Automatically translated from Portuguese.