Fox News became the first major network on Tuesday night to project that Democrats will win back control of the House of Representatives. Calling the swing "a major setback to President Trump's legislative agenda," Fox News also suggested that the Democrats might use their advantage to investigate Trump, although House Minority Leader Nancy Pelosi has implied otherwise.

Despite the projections, Democrats have mourned the lack of an obvious "blue wave" on Tuesday, with CNN political commentator Van Jones calling the early results "heartbreaking." As of 9:40 p.m. ET, FiveThirtyEight gave Democrats a 4 in 7 chance of regaining the House and a less than 5 percent chance of retaking the Senate. Jeva Lange

Shares in GameStop, a Texas-based video game retailer, started rising on Jan. 11, and now the company's market value is higher than American Airlines Group Inc., Under Armour Inc., and other large companies. By end of trading Tuesday, GameStop was worth more than $10 billion, up from $1.2 billion at the beginning of the year. The most recent jump in market valuation was fueled by a tweet Tuesday from Elon Musk, but the engine driving GameStop's bizarre reversal of fortune is individual day traders who frequent Reddit's WallStreetBets forum.

These "ordinary investors, stuck at home in the pandemic," swap tips and hatch trading strategies at WallStreetBets and other forums, "often buying things Wall Street has bet against," The Wall Street Journal reports. "Many tout their long-shot wagers with the expression 'YOLO.'" GameStop is by far the biggest manifestation of this phenomenon, but the small investors have also pushed up the valuations of BlackBerry, AMC, and Chinese electric car company NIO.

"The scale and pace of the rally in GameStop, BlackBerry, and other shares this year have caught Wall Street by surprise," the Journal says. And hedge funds that had shorted, or bet against, GameStop in particular have lost billions. Melvin Capital, a hedge fund run by Gabe Plotkin, got a $2.75 billion emergency infusion after its short bets on GameStop and other stocks drained 30 percent of its value this year, Bloomberg News reports.

Melvin Capital threw in the towel late Tuesday and abandoned GameStop at a steep loss, CNBC's Andrew Ross Sorkin reported Wednesday morning.

Most of the WallStreetBets traders buy call options, not shares of companies, allowing them to make fairly large bets with small investments, the Journal explains. When small investors buy call options in large numbers, as they have with GameStop, the firms selling the options typically hedge by making a separate trade, in this case often buying GameStop shares.

"In extreme cases, this can become a self-reinforcing mechanism, with day traders buying more calls and driving the market makers to buy shares, lifting the stock's price and encouraging more traders to jump in on the action," the Journal explains. But this "momentum trading" is risky, and industry veterans foresee the rally crashing under the weight of market fundamentals. Read more about how the WallStreetBets phenomenon works at The Wall Street Journal. Peter Weber

House Democrats will introduce a budget resolution Monday that starts the process for the Senate to use a legislative tool called budget reconciliation to pass President Biden's $1.9 trillion COVID-19 relief package with 51 votes, meaning no Republicans would need to support it if the Democratic caucus stuck together. But Democratic leaders also made sure to underscore Tuesday that they would prefer to pass the COVID-19 package with Republican support, through the regular legislative process.

"The work must move forward, preferably with our Republican colleagues but without them if we must," Senate Majority Leader Chuck Schumer (D-N.Y.) said in a news conference. "Time is of the essence to address this crisis." Biden's package includes $1,400 direct payments, a hike in the child tax credit, an extension of emergency jobless benefits set to expire March 14, billions for vaccine distribution and schools, and a $15 national minimum wage, among other provisions.

Ending the legislative filibuster is off the table for now, and using the reconciliation process comes with limitations. Many Democrats, skeptical that any Republicans would support even a smaller stimulus package, see it as the only viable option. But a handful of moderates from both parties are urging Biden to make a deal. One Senate Democrat could thwart the legislation.

"I'll guarantee you I can sit down with my Republican friends and find a pathway forward," said Sen. Joe Manchin (D-W.Va.), who organized a meeting between bipartisan Senate moderates and Biden's team on Sunday. "Let me try first." Senate Budget Committee Chairman Bernie Sanders (I-Vt.) disagreed. "People can talk to whoever they want to talk to, but this country faces enormous crises," he said. "Elections have consequences. We're in the majority, and we've got to act."

Starting the ball rolling for budget reconciliation leaves plenty of time for bipartisan talks. "If we're going to use reconciliation, we have to go forward with it pretty soon, but that doesn't prevent a negotiated package as well," said House Budget Chairman John Yarmuth (D-Ky.). "At worst, it's Plan A and at best it's Plan B." Peter Weber

Former President Donald Trump's departure from office "caused a major rift in the GOP, but his relationship with the GOP isn't the only one that's been strained," Trevor Noah said on Tuesday's Daily Show. "You see, there was another organization that played an equally important role in Trump's political rise: Fox News. For four years, they treated Trump the way a white lady treats her dog: he was a good boy, and if he peed on you, it was your fault. And the love was mutual. But sometime between Trump's campaign for re-election and his campaign for insurrection, the relationship went south."

Now, even after all Fox News did for Trump, "it looks like this love affair is over," Noah said. "And even though Trump's been married three times, this might be the biggest breakup of his life. And we can't wait for the courtroom drama that this is going to inspire." He was serious about not waiting: The Daily Show cast took the liberty of acting out the divorce court drama, and things got pretty intense when the Trump and Fox News lawyers battled over who gets custody of the Republican Party in the divorce settlement.

The Daily Show also revisited some of the good times Trump and Fox News enjoyed over the past four years — and showed that Fox News has already moved on just fine without him. Peter Weber

Lots of things went wrong with law enforcement before and during the Jan. 6 siege of the U.S. Capitol by a mob of supporters of former President Donald Trump, and one of them was the long delay in deployment of National Guard reinforcements. Those failures were the focus of a closed-door hearing Tuesday before the House Appropriations Committee, and among those who testified was Maj. Gen. William Walker, commander of the D.C. National Guard. Walker told The Washington Post on Tuesday that the Pentagon had tied his hands.

Because Washington, D.C., isn't a state, the president is nominally in charge of the D.C. National Guard. In practice, the defense secretary and Army secretary are in command, but Walker, like all National Guard commanders, typically has the power to take military action in an emergency. "All military commanders normally have immediate response authority to protect property, life, and in my case, federal functions — federal property and life," Walker told the Post. "But in this instance I did not have that authority."

In a Jan. 5 memo, Army Secretary Ryan McCarthy, who was Walker's direct superior until he stepped down last week, prohibited Walker from deploying a ready force of 40 Guardsmen without a formal "concept of operations" plan, the Post reports. In a Jan. 4 memo, acting Defense Secretary Christopher Miller had prohibited McCarthy from authorizing the deployment of D.C. Guardsmen carrying helmets, body armor, riot control agents, or weapons without his approval, and said the quick reaction force could be dispatched "only as a last resort."

Pentagon officials say the requirement for top-level authorization was a response to the D.C. Guard's participation in Trump's widely criticized crackdown on racial justice protests in June. "When you go back to times when we've done this, like June, we wanted to make sure we were very careful about the employment — careful about fragmentary orders," McCarthy told the Post.

There was also concern at the Pentagon about sending soldiers nominally under Trump's command into a riot of Trump supporters, because that might give the impression Guardsmen were aiding a pro-Trump coup, the Post reports. Those concerns, valid as they may be, don't explain why it took three hours for the Pentagon to deploy the National Guard after the rioters had already overrun the Capitol. Read more at The Washington Post. Peter Weber

For anyone inclined to care about such things, President Biden's inauguration last Wednesday drew higher ratings that former President Trump's swearing-in four years earlier, Nielsen reported Tuesday. In fact, the only two inaugurations to draw more viewers were Ronald Reagan's first inaugural in 1981, watched by 41.8 million viewers, and Barack Obama's 2009 swearing-in, with 37.8 million people watching. Biden's 33.8 million viewers easily topped Trump's 30.6 million, Nielsen said.

More people watched Trump's inauguration on Fox News, though. The network saw a 77 percent decline in viewers for Biden's ceremony versus Trump's. CNN more than made up for the difference — its inaugural coverage was the No. 8 show in all of prime time last week, Nielsen said. In the cable wars, CNN came in first last week, followed by MSNBC and then Fox News.

Trump, if he were bothered about getting lower ratings than Biden, might take a little bit of solace in the fact that more people attended his inauguration in person four years ago. Peter Weber

At least six members of the Proud Boys, a group of right-wing nationalist "Western chauvinists," have been arrested in connection with the Jan. 6 violent siege of the U.S. Capitol. Among those charged is Joseph Biggs, a Proud Boy leader who led about 100 men from former President Donald Trump's "Stop the Steal" rally to the Capitol.

Prosecutors and federal investigators are now trying to determine how closely the Proud Boys communicated during the siege and whether they planned the incursion in advance, The New York Times reports.

Investigators have recently turned their attention to two Proud Boy organizers on the West Coast, Ethan Nordean of Auburn, Washington, and Eddie Block from Madera, California, the Times reports, citing a federal law enforcement official. Nordean, also called Rufio Panman, has not been charged, and Block, who live-streamed the insurrection, told the Times that federal agents seized his electronic equipment on Friday. Investigator are also scrutinizing the role of Proud Boys chairman Enrique Tarrio, who was not at the riot because he had been banned from Washington, D.C., two days earlier.

Still, "despite having launched one of the most sprawling inquiries in American history, investigators have yet to unearth clear-cut evidence suggesting there was a widespread conspiracy to assault the Capitol," the Times reports. The Wall Street Journal made a pretty compelling case Tuesday that the Proud Boys were at least key instigators of the assault, based on a thorough review of video and social media posts.

The Proud Boys have publicly downplayed their involvement in the Capitol incursion. Tarrio told the Times a week after the siege that it was misguided and anyone who damaged the Capitol or assaulted police should be prosecuted. The handful of Proud Boys arrested after being filmed breaking into the Capitol, like Dominic Pezzola, "obviously, they didn't help our cause," he added.

Federal authorities as of Monday had charged about 150 of the more than 800 people who charged into the Capitol, and "it's likely not everyone will be tracked down and charged with a crime," The Associated Press reports. There were few arrests during the incursion, and "federal prosecutors are focusing on the most critical cases and the most egregious examples of wrongdoing." Some Capitol insurrectionists were turned in to the FBI by friends and family members, AP notes, but in dozens of cases, the rioters themselves "downright flaunted their activity on social media." Peter Weber