Trump Reportedly Indifferent to Midterm Losses, Eyes Executive Actions and Pardons
Trump is reportedly indifferent to losing Congress in 2026, telling advisers he will govern through executive actions and pardons. Here is the trade angle.
President Donald Trump is reportedly unbothered by the prospect of Republicans losing their congressional majorities in the 2026 midterms, according to a new Axios report. The reasoning: he plans to govern through executive actions and pardons rather than push legislation through Congress.
What the report says
Trump would prefer a big win, but he seems indifferent to the election and the possibility of endless Democratic investigations of his family, wealth and policies, his closest advisers told Axios. A big reason: Trump knows he will emerge just as strong, or even stronger, heading into his final two years, at least among Republicans.
The report says Trump will enjoy a more pro-Trump Republican Congress win or lose, play 2028 kingmaker, and further test the boundaries of presidential power beyond legislating, his preferred method anyway. He will use pardons to protect his people, the advisers say.
Why the market should care
Executive-driven policy tends to move faster and with less warning than legislation. That means tariffs, sanctions, regulatory rollbacks, and agency-level decisions become the primary policy lever, and headline risk stays elevated across sectors sensitive to Washington.
Divided government also historically caps the odds of large fiscal packages, which shifts the macro focus back onto the Fed, the deficit, and executive-branch trade policy.
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The pardon angle
The Wall Street Journal estimated Trump has already issued roughly six times his full first-term pardon and commutation total over the first 15 months of his second term, and administration officials say he has repeatedly raised pardons with aides, particularly when staff have suggested they could face prosecution or congressional investigations.
If Democrats capture even one chamber, they gain subpoena power to open investigations, drag officials to Capitol Hill for hearings, and, with a simple House majority, the ability to impeach Trump for a third time. Traders should assume that possibility keeps the executive-order pace elevated into 2026.
Options market and stocks to watch
With policy shifting further to executive action, watch sectors most exposed to unilateral moves on tariffs, energy permitting, and antitrust:
TSLA: Watch for reactions to any EV, tariff, or regulatory executive orders that shift the competitive landscape.
XOM: Energy names remain sensitive to executive-level permitting and drilling policy.
LMT: Defense contractors track closely with executive foreign-policy and sanctions decisions.
GOOGL and META: Antitrust and content-moderation moves out of the executive branch remain a live risk.
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