Here's what Wall Street is saying about the midterm election results

On trade

“Congress over the years has ceded a great deal of authority on trade to the Executive. Because of this, the President will be free to pursue a more aggressive strategy on trade with China, if he wants to do so. The crucial question is whether he will want to make a deal with Xi Jinping or not. While continuing tough rhetoric on trade would not directly hurt the President politically, it would damage both the global economy and U.S. economy, which could leave him more vulnerable in 2020.” - David Kelly, chief global strategist at JPMorgan Funds

“Congress has limited power to restrain the President on trade regardless of which party is in control. But even if investors are right and the legislative gridlock provides a check on the Trump administration, we still think that European equities will come under pressure next year. This is because we expect the US economy to slow sharply then. If history is any guide, European stocks would probably perform just as badly as their US peers in this scenario.” -Simona Gambarini, markets economist at Capital Economics

On infrastructure

“Democrats might be willing to support more money for infrastructure if it included improvements to the electrical and internet grids. However, a lack of money and a lack of available construction workers suggests that a moderate rather than large infrastructure bill is the most that could occur.” - David Kelly, chief global strategist at JPMorgan Funds

“It is possible that President Donald Trump and the Democrats could agree a deal to boost infrastructure spending, but there is probably more chance of an extended government shutdown. Overall, though, the midterms are unlikely to have a significant impact on the economy.” - Nikhil Sanghani, assistant economist at Capital Economics

“While Democrats in Congress might favor increased infrastructure spending, they could seek to finance it by reducing defense spending. That would limit the boost to the industrial sector overall. We are cautious on the sector, which is being constrained by concerns that the industrial economic cycle has already peaked and by rising trade protectionism.” - Justin Waring, investment strategist at UBS Financial Services

On health care

“Our Health Care analysts have viewed a split Congress as the most positive outcome for their sector, since no major legislation would likely be enacted. Though with more Democrats in Congress, our Health Care Facilities team seems some possibility Democrats may pursue a moderate policy agenda based on stabilizing the exchanges/encouraging more states to expand Medicaid, which they see as positive for facilities and mixed for managed care organizations.” -Bank of America Merrill Lynch

On the federal budget

“A Republican sweep would more than likely have immediately given rise to market speculation on more deficit-financed tax cuts, leading to a stronger dollar and higher Treasury yields. While possibly helpful for US equities in the short term, it would probably have increased the risks of the economy overheating and put additional strain on emerging markets.” - DWS Investments spokesperson Oksana Poltavets

“We expect the stance of fiscal policy to gradually shift from a tailwind to neutral for growth, confirming our view for growth to gradually slow in coming quarters as fiscal stimulus fades and for the Fed to continue to gradually raise rates.” - Bank of America Merrill Lynch

“A bill making fresh tax cuts, extending the individual tax cuts, or making technical corrections is likely to be caught up in partisan differences and not pass. Some technical corrections may be included in an omnibus, unrelated bill. The typical negotiations over government funding are heated (and may involve shutdown risks) but ultimately lead to a deal to raise the budget caps in line with past increases.” - Michael D Zezas, strategist at Morgan Stanley

On financial regulation

“A Democratic majority in the House could work to slow deregulation in the financial services sector. In particular, it would reduce the prospect of legislation rolling back parts of the Dodd-Frank act, which has constrained the industry in the wake of the 2008 financial crisis. Despite this, we still believe there is scope for optimism about the sector, with financials benefiting from rising rates and low percentages of loan default. US industrials could receive less support.” - Justin Waring, investment strategist at UBS Financial Services

“[Regulatory reform measures] have already been signed into law. The bar to unwind any of these measures is now officially un-achievable: a two-thirds Democratic majority in both the House and Senate would have been needed to pass new legislation doing away with any or all of this (in order to survive a near-certain veto from President Trump).” - Paul Eitelman, strategist at Russell Investments

On immigration

“[Trump] will likely perceive that his hard line on immigration worked in turning out the Republican base on election day and so he is likely to maintain this hard line over the next two years. However, this would exacerbate a current worker shortage and could contribute to somewhat slower economic growth in 2019 and 2020 than a more immigrant-friendly policy.” -David Kelly, chief global strategist at JPMorgan Funds

On the possibility of impeachment

“The act of impeachment alone could create noise in markets—although we don’t see any potential decline (or bounce) as long-lasting. Why? Generally speaking, it’s changes in economic and corporate earnings fundamentals that drive volatility in markets—and not the other way around. The impeachment of President Bill Clinton in December 1998 provides a telling example of this: Stocks actually climbed during this period, after bottoming out earlier in the fall. Why? The US economy was humming along and the dot-com boom was in full swing—issues of greater importance to markets.” - Paul Eitelman, strategist at Russell Investments