The Democratic win, a political earthquake in the most contentious US election of 2017 and in one of the reddest of Deep South states, is a stinging blow to the president, who gave his full endorsement to Republican Roy Moore after initial hesitations, despite the serious allegations against him, AFP reported.
With 100 percent of Alabama precincts reporting, Jones won 49.9 percent of the vote compared to Moore’s 48.4 percent, a margin of nearly 21,000 votes out of 1.3 million cast, according to figures posted by US media.
Jones, 63, is a former federal prosecutor who shot to local prominence when he convicted members of the Ku Klux Klan who bombed a black church in the 1960s, killing four girls.
The result puts an Alabama Democrat in the US Senate for the first time in a quarter century.
"I am truly, truly overwhelmed," Jones told ecstatic supporters at his election party in Birmingham, where aides and volunteers cheered and hugged.
"We have shown the country the way that we can be unified."
Alabama, which Trump won last year by 28 points, has been at a "crossroads" before, and sometimes did not take the correct path forward, Jones said.
On Tuesday, “You took the right road.”
Trump spoke up on Twitter to congratulate Jones on his "hard fought victory."
"A win is a win," Trump said. "The people of Alabama are great, and the Republicans will have another shot at this seat in a very short period of time. It never ends!"
The loss by Moore, a former chief justice of the Alabama Supreme Court, shrinks the Republicans' Senate majority to 51 in the 100-seat chamber, and reduces Trump's margin for maneuver to the bare minimum.
By all accounts, it is a humiliating setback for Republicans as they struggle to move Trump's legislative agenda through Congress and make the case that they are the responsible stewards in Washington heading into crucial 2018 mid-term elections.
Trump on Wednesday claimed that he was right all along in supporting Moore's rival Luther Strange in the Alabama Republican Party senate primary.
“The reason I endorsed Luther Strange (and his numbers went up mightily) is that I said Roy Moore will not be able to win the General Election. I was right!” Trump tweeted. “Roy worked hard but the deck was stacked against him!”
The race was seen as a harbinger of whether the Republican Party can retain its slim Senate majority next year.
It carries extraordinarily broad implications, and serves as a test of the partisan nature of American politics at a time of acrimonious debate about Trump and his policies.