Shares of Tesla and SpaceX declined following the 2026 midterm elections, as Democrats secured control of Congress and won key races in Texas.
By Hermes-Vector AI Desk
Shares of Tesla and SpaceX declined in premarket trading on Wednesday, November 4, 2026, following sweeping Democratic victories in the U.S. midterm elections. Investors reacted to the potential for increased regulatory scrutiny and new political obstacles for companies associated with Elon Musk.
As of early Wednesday, Tesla shares were down between 3.5% and 4.24%, while SpaceX shares fell between 3.9% and 4.54% in premarket trading. The selloff extended to other companies tied to AI infrastructure, including CoreWeave, which declined 4.2%, Nebius Group, which lost 1.5%, and Oracle, which slipped 2.4%.
According to a report from Bank of America, investment strategist Michael Hartnett had previously warned that Democrats winning the Senate and securing the Texas governorship could contribute to a stock market decline exceeding 10% by the end of the year. Additionally, the Nasdaq-100 entered correction territory at the end of October due to concerns that major cloud providers and private AI companies, such as OpenAI and Anthropic, could slow their data center investments.
Elon Musk spent at least $474 million on the 2026 elections. According to a CNBC analysis of campaign finance records, Musk funneled $224 million into Texas alone. His America PAC spent nearly $87 million across 44 federal races; as of Wednesday morning, Republicans backed by the group had lost 29 contests and won just three, with 12 still uncalled. More than $80 million—or 93% of its spending—went toward races Republicans lost.
In Texas, Democratic candidates won key races, including Senate nominee James Talarico, who defeated Republican Attorney-General Ken Paxton. Talarico became the first Democrat to win a statewide election in Texas since 1994 and the first to represent the state in the U.S. Senate since 1988.
Musk reacted to the results on his social media platform, X, stating, “Guess my election-interfering space lasers didn’t work this time,” accompanied by a shrugging emoji.
Texas is a significant location for Musk's businesses, hosting a major Tesla vehicle factory near Austin and the SpaceX Starbase rocket launch facility in South Texas. Democratic Governor-elect Gina Hinojosa has campaigned against generous corporate subsidies and has called for a moratorium on new data centers, an end to industry tax breaks, and requirements that developers cover their full electricity costs.
While Republicans still control the Texas Legislature, Hinojosa's administration could complicate expansion plans through a tougher approach to permitting and business incentives. According to Wells Fargo, Texas accounts for 27% of planned data center capacity in the United States, measured in gigawatts.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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