What will change with democrats in control of Congress?

Democrats won the midterms, taking control of both chambers of Congress. Republicans even lost in some traditionally red states. Not even Elon Musk spending $446 million of his own money on the GOP campaign helped. 

What could change in US politics now?

On the domestic front, Democrats plan to use their majority to lower the cost of living, restore health insurance tax credits, and reverse Medicaid cuts.

They also want to investigate possible corruption involving Trump, his family, and administration officials. Prediction and betting markets even put the odds of another Trump impeachment at nearly 80%. But actually getting him out of office is a different story: that would take 67 votes in the Senate, and it's hard to see Republicans voting against.

As for what could hit the markets, Democrats may push for tighter AI rules and limit new data center construction. Just the prospect of that has already put pressure on stocks such as Tesla, SpaceX, Oracle, CoreWeave, Apple, and Microsoft.

Still, it's hard to see Democrats going so far as to pull the plug on a sector that's driving the US economy and risking China taking the lead in the AI race.

Crypto could also take a hit as Democrats may tighten the rules for crypto exchanges and stablecoins and crack down on money laundering. In the short term, that could fuel volatility in the crypto market, putting pressure on major assets. Bitcoin and Ethereum prices could become particularly sensitive to regulatory headlines and any signs of a tougher approach to the industry.

As for geopolitics, democrats can block new military spending, limit funding for military operations, and force votes on any further US involvement in conflicts. They can also demand answers from the administration about where American money is going.

In theory, this could put pressure on defense stocks. But it's still hard to tell how far Democrats are willing to go in the Middle East crisis. On the other hand, any cuts in spending there could be offset by increased funding for Ukraine.

Geopolitical uncertainty could also support demand for traditional safe-haven assets such as gold. If tensions escalate or investors become more concerned about political instability in Washington, gold prices could benefit as investors seek to protect their portfolios. However, the outlook will also depend on the US dollar, interest rates, and broader market sentiment.

What can Trump do? He can veto bills, and Democrats don't have the two-thirds majority in both chambers needed to override him.

In short, Democrats won't take power away from Trump, but they'll make it much harder for him to do things his way. He'll have to work with Congress and find compromises. For markets, that could mean more uncertainty.