Democratic Win Clouds CLARITY Act Outlook as S&P Futures Rebound

Democrats’ capture of both chambers of Congress has clouded the outlook for the CLARITY Act, a crypto market-structure bill, as U.S. markets rebounded after an overnight selloff tied to the midterm results.

S&P 500 futures fell 1.4% Tuesday night before recovering the full loss by 3:05 a.m. ET Wednesday, when they stood 0.02% above their previous settlement. The S&P 500 was up 1.17% at 9:32 a.m. ET, while Bitcoin (BTC) traded near $78,500, up about 1%.

The Senate rejected a procedural motion on the CLARITY Act 49-50 in September. Democratic senators opposed the bill, arguing it did not adequately address potential conflicts of interest involving the Trump family’s crypto business. TD Cowen Washington research analyst Jaret Seiberg said the political climate was becoming less favorable for the bill without conflict-of-interest standards.

Tariffs are another policy focus. Former U.S. Ambassador to Vietnam Ted Osius said tariff authority rests mainly with the executive branch. Legislation to repeal duties could face President Donald Trump’s veto, which would require two-thirds support in each chamber of Congress to override.

The incoming Congress begins its session Jan. 3.