Fresh off the exhausting financial regulatory reform debate, Wall Street is looking for a break after the midterm elections in the form of a friendlier Washington.

Expected Republican gains at the congressional elections are likely to tone down some of the anti-Wall Street rhetoric coming from Democrats since President Barack Obama took office last year.

Democrats used their majorities to push through reform but alienated banks in the process. Many on Wall Street are eager for a damping of Obama's zeal for regulation of business, like the healthcare reform and financial industry overhaul.

"There's a cliché on Wall Street that gridlock is the best of all possible worlds," said Michael Holland, money manager with Holland & Company in New York. "It would be a situation where we have some checks and balances."

A Republican rout could equate to a "come-to-Jesus moment" for the administration" that forces it to take a more centrist approach, said Gregory Valier, chief political strategist at the Potomac Research Group.

With Republicans set to pick up seats in the Senate and perhaps even win control of the House of Representatives, investors are likely to get at least some of what they want. A GOP victory could provide a major boost to the chief item on Wall Street's agenda — extension of Bush-era tax cuts past their 2011 expiration date.

"The more Republicans you have, the easier it should be to negotiate a more friendly tax regime," said Dan Rip, president of Bradley, Woods & Co, which produces research for investors on government policy.

The current Congress is due to look at the tax cuts by the end of this year, but it may kick them into 2011.

But gridlock brings risks, too, and if Congress and the president spend the next two years positioning for the 2012 election, progress on a host of issues, including tax policy, entitlement spending and climate change, could stop cold.

Some believe the desire for gridlock is a throwback to the Clinton years, when a Democratic administration and GOP Congress took a largely hands-off approach during an economic boom.

"You can't rule out hopeless gridlock where they can't get anything done," said Valier, "and you have to wonder if that would really be unabashedly positive for anyone." Then again, the current environment seems to call for more than benign neglect, and in fact, Wall Street was vocal in its desire for government assistance when the financial crisis erupted in late 2008.

There's also a chance that a GOP victory would not bring the reform investors want.

"My investment assumption is that taxes will go up regardless of what happens  — even if Republicans win," said Richard Bernstein, chief executive of Richard Bernstein Capital Management LLC. "People are kidding themselves if they think otherwise. There's no way to discuss fixing the fiscal situation without a combination of tax hikes and spending cuts."

But he said as long as the capital gains tax rate stays below the income tax rate, "people will still have incentive to take risks." Investors have made no secret of their worries about the deficit, but low interest rates suggest that is not a primary concern for markets right now.

Extending Bush-era tax cuts would also increase the projected deficit.

Wall Street executives feel burned by the treatment they have received from Washington under Obama, who charmed bank executives during his 2008 presidential bid.

The rhetoric has been tough, with Obama himself referring to bankers as "fat cats" and bemoaning the "reckless risks" taken by big banks.

"When I talk to investors, the one thing I hear over and over again is this: 'The White House is tone deaf,"' said Quincy Crosby, market strategist at Prudential Financial. "They are more ideological than pragmatic. The sense that they're anti-business is palpable."

However, Bernstein offers a more measured view, saying Obama's relatively light touch on regulatory reform and a wave of corporate profits "makes it hard to say we're in an anti-business environment," Bernstein said. "Some of the discussions are absolutely hysterical."