EL7 Research · US Politics and Markets
4 November 2026 · Results provisional as of 08:02 GMT · Futures prices as of 07:00 GMT
Democrats won both chambers of Congress on the night of 3 November, leaving Donald Trump to serve his final two years facing a Congress where his party controls neither chamber. Hours before polls closed, the president made his plan clear: use the veto until his opponents come seeking a deal. This research explains how the veto works and why it is hard to override, what previous presidents did when facing a hostile Congress, what Trump can do alone, and where Democrats hold real checks on his power. Using EL7 data, it measures how markets moved in every comparable confrontation since 1995.
The result matched the outcome prediction markets had favoured, by a wide margin. CBS called the House for Democrats at 10:15 pm Eastern Time (03:15 GMT), then the Senate at around 11:35 pm (04:35 GMT). By NBC’s 3:02 am Eastern Time count, Democrats had secured 54 Senate seats against 43 for Republicans, with three races unresolved, after flipping seven Republican seats including Maine and Texas. In the House, at least 228 seats had been called for Democrats, with NBC projecting a final total of around 255 seats.
The veto protects the president’s position by allowing him to reject a bill passed by Congress. Overriding a veto requires two-thirds of those present and voting in each chamber: 67 senators and 290 representatives with full attendance. Even in their best-case scenario, Democrats would need 11 to 13 Republican senators and around 35 Republican representatives on every vote. Throughout US history, Congress has overridden only 112 of 2,599 vetoes, or roughly 4.3%.
Trump himself knows this tool well. In his first term, he used no vetoes in 2017 and 2018, when his party controlled Congress, then used ten after Democrats took the House in January 2019. Only one was overridden. He told CBS hours before polls closed: “I have the ultimate power — it’s called ‘veto’.”
Democrats won tools to obstruct the president, rather than impose their agenda on him. They cannot enact legislation over his objections, but they hold three tools he cannot bypass: funding (the budget and debt ceiling), appointments (judges, Federal Reserve seats and any Supreme Court vacancy), and oversight (subpoenas, investigations and impeachment proceedings in the House).
The president retains broad powers. He issued 288 executive orders (Executive Order) in his second term through 1 October, more than in his entire first term. An executive order is a presidential decision made under executive authority without legislation. When the US Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in February, tariffs imposed under laws requiring no vote remained in place, while the only tool that required Congress fell away.
Markets fear the debt ceiling, not a government shutdown. Using EL7 data, we measured seven confrontations between the White House and Congress since 1995: in six, the worst decline in the S&P 500 during the event did not exceed 2.7%. The sole exception was the debt ceiling crisis in summer 2011, when the index lost 16.77% and the US credit rating was downgraded for the first time. Remaining headroom under the debt ceiling is now about 798 billion dollars, with the ceiling likely to be reached during 2027, within this Congress's term.
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