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Good morning! — The results are in (well, most of them): Republicans are poised to take the House, but GOP leaders will likely be operating with a much narrower majority than many anticipated.

Our Sarah Ferris and Ally Mutnick: "Republicans remain favored to win the House majority — but it was not the blowout victory that some predicted. ... With just five seats standing between them and the speaker’s gavel, GOP lawmakers and officials started the night predicting their gains will be far larger. And their confidence was bolstered by competitive polling in districts like the Rhode Island open seat that GOP candidate Allan Fung had hoped to flip, as well as heavily Democratic turf in South Texas, the greater Los Angeles area, upstate New York and the suburbs of Portland, Ore. But that enthusiasm was somewhat tempered.”

The GOP came into the midterms with some significant advantages. President Joe Biden's approval rating is underwater amid growing fears of a recession, soaring consumer prices and litany of international crises.

House Minority Leader Kevin McCarthy told supporters early Wednesday morning that “it is clear that we are going to take the House back.”

But some Democrats “are hopeful they can hold the GOP to a small majority, making life difficult for a likely future Speaker Kevin McCarthy,” write Sarah and Ally.

It could be several more days before we know the outcome of the Senate as we await results from Arizona, Nevada and Wisconsin, while Georgia appears to be headed for a run-off.

But back to the House. McCarthy said, “the American people are ready for a majority that will offer a new direction, that will put America back on track,” adding “Republicans will deliver it.”

What would a Republican Congress mean for Wall Street? Brace yourselves, our Zachary Warmbrodt and Sam write:

"Wall Street loves Republican tax cuts and deregulation. It’s going to hate the GOP’s plans for 2023.

"Conservatives who are likely to be in the majority come January are pressing GOP leaders to send a message to big financial firms: Stop appeasing the left with 'woke' business practices, keep financing fossil fuels and cut ties with China. House Republicans are poised to have committee gavels and subpoena powers to back that up, while Senate control is more in doubt.

“GOP lawmakers are singling out major asset managers and their Washington trade groups as targets because of climate investing practices they see as hostile to oil, gas and coal. Some Republicans want to continue hauling in big bank CEOs to publicly testify — a tradition established by liberal Democrats. GOP senators are already demanding that law firms preserve documents related to how they advise clients on environmental and social initiatives, signaling a potential investigation. Wall Street firms and Washington lobbyists are preparing for subpoenas.”

Caught in the middle: Potential Republican committee leaders, who are facing pressure from the rank-and-file to take a more populist approach.

“My members are intent on sending a message that you can’t kowtow to a far-left agenda and still have Republicans fighting the good fight on behalf of free markets and a marketplace that would benefit these companies,” Rep. Patrick McHenry (R-N.C.), who is poised to chair the House Financial Services Committee, said in an interview. “This is a complicated factor for sure.”

“The shift is leaving big banks and investment firms with a shrinking number of reliable allies in Washington,” Zach and Sam write. “The far left and the far right are increasingly eager to take shots at the industry, putting it under constant political siege.”

IT’S WEDNESDAY — Have tips, story ideas or feedback? You know what to do: [email protected] and [email protected].

Wholesale inventories data released at 10 a.m. … Richmond Fed President Tom Barkin speaks on the economic outlook at 11 a.m.

DC’S CRYPTO WHALE RUNS AGROUND — FTX founder Sam Bankman-Fried dropped a grenade on Washington’s crypto policy agenda when he announced the sale of his embattled Bahamas-based exchange to Binance on Tuesday. The swift collapse of the Democratic megadonor’s crypto empire — the trouble started after a Nov. 2 CoinDesk report found that a Bankman-Fried-owned trading fund, Alameda Research, had propped up its balance sheet with an illiquid FTX-issued token — is already attracting new scrutiny from CFTC and Texas regulators.

The question now is how much worse can it get?

Federal regulators have repeatedly warned that crypto’s highly interconnected network of lenders, hedge funds, exchanges and trading firms could be exposed to market contagion. Alameda and FTX are major investors — and borrowers — in that ecosystem.

Traders are aware of those risks. Crypto markets fell by 10 percent — erasing roughly $100 billion of value — in the hours after Bankman-Fried and Binance CEO and co-founder Changpeng “CZ” Zhao announced the acquisition on Tuesday.

Meanwhile, FTX’s downfall will cast uncertainty on a bipartisan bill sponsored by Senate Agriculture Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.) that would give the Commodity Futures Trading Commission oversight of digital exchanges and brokerages. Bankman-Fried was the bill’s biggest champion within the crypto industry and its opponents — who’ve raised red flags over how it could block decentralized finance startups — plan to put up a fight if lawmakers decide to move forward.

“The entire conversation has to be immediately wrestled from FTX,” said Ryan Selkis, a crypto investor and founder and CEO of industry data provider Messari. “I don’t get surprised by things in this industry, but this is shocking.”

Boozman spokesperson Patrick Creamer on Tuesday said negotiations on the bill are ongoing and that “this development doesn’t change that work.”

YELLEN HEADS TO INDIA — WSJ’s Andrew Duehren: “Treasury Secretary Janet Yellen’s trip to India this week will be the latest attempt by the Biden administration to look past the emerging power’s longstanding ties to Russia and deepen a relationship that it hopes will serve as a counterweight to China.”

PHAM: KALSHI SHOULD WITHDRAW — Our Declan Harty: A top Wall Street regulator, CFTC Commissioner Caroline Pham, “is urging a startup to withdraw its proposal to launch election betting in the U.S., warning that her agency is poised to reject the plan based on ‘flawed’ reasoning.

TEXTED— Bloomberg’s Dawn Lim and Allison McNeely: “Financial regulators are looking at the biggest private equity firms’ use of WhatsApp and other messaging apps for work, in a signal that the US is ramping up its push to police Wall Street’s electronic communications.”

CHANGE UP — Bloomberg’s Claire Ballentine: “US workers are having a harder time switching jobs than they expected. That’s the takeaway from a new Harris Poll study that examined job seekers’ recent experiences with the labor market, which is still strong but starting to show cracks. More than 70% of those looking for a new role said it was more difficult than they had anticipated.”

TECH HITS — WSJ’s Jeff Horwitz and Sam Schechner: “Meta Platforms Inc. will begin laying off employees on Wednesday morning, Chief Executive Mark Zuckerberg told hundreds of executives on Tuesday.”

US-TAIWAN TRADE TALKS — WSJ’s Yuka Hayashi: “The U.S. and Taiwan began two days of face-to-face meetings in New York on Tuesday aimed at strengthening trade and economic ties at a time of ramped-up tensions between Washington and Beijing. The meetings, which were disclosed earlier this year, are expected to cover areas including agriculture and digital trade.”

JAPAN DITCHES TREASURIES — WSJ’s Sam Goldfarb and Megumi Fujikawa: “Japan has been one of the world’s biggest buyers of U.S. Treasurys for years, helping to hold down borrowing costs for American businesses and consumers. Now that is changing.”

NETWORK EFFECTS — WSJ’s AnnaMaria Andriotis: “Goldman Sachs Group Inc. has expressed interest in buying a payments-technology firm to further build out its credit-card capabilities, according to people familiar with the matter.”

Nobel Prize-winning economist Edward C. Prescott, who helped transform thinking on how central bankers and other policy makers should steer economies and on what causes booms and busts, died Sunday in Paradise Valley, Ariz. He was 81. — WSJ’s James R. Hagerty

Russia has surpassed Iraq and Saudi Arabia as India’s largest supplier of oil, according to independent research companies, as Asia’s third-largest economy cashes in on steep price discounts caused by sanctions against Moscow. — FT’s Chloe Cornish, John Reed and Tom Wilson