Tesla and SpaceX Shares Fall After Democrats Win Congress and Texas
Musk gave at least $446 million to Republicans. After Democrats won both chambers of Congress and the Texas governorship, Tesla and SpaceX fell while the broad market rallied, and the incoming House Oversight chair told Musk's side to "lawyer up."
Elon Musk gave at least $446 million to Republican candidates and groups before the midterm vote. On Wednesday, with Democrats having won both chambers of Congress and the Texas governor's race, Tesla and SpaceX shares slid even as the broader US market rallied.
The S&P 500 rose 1.2% in early trading and the Dow added more than 1,100 points. Tesla traded at $379 before the opening bell, down 4.89%, according to Yahoo Finance figures. SpaceX fell 5.67% to $133.30 in premarket trading, below its $135 June listing price, and was still down about 4% after the open.
Reports differ on the size of the premarket drops. One puts SpaceX down 3.8% and Tesla down 3.6%, against the 5.67% and 4.89% cited elsewhere. Neither says when it measured, so the gap likely reflects different timestamps.
Texas and Washington
In Texas, Democrat Gina Hinojosa defeated Republican Greg Abbott in the governor's race. Hinojosa opposed a proposed sale of a state park on the beach to SpaceX and urged a temporary ban on new data center projects until community safeguards are in place.
In Washington, Democratic lawmakers are set to scrutinize AI infrastructure, government contracts and corporate subsidies, and are reportedly weighing probes into Musk's businesses. Incoming House Oversight Committee Chair Robert Garcia answered the result with a two-word message:
"Lawyer up."
Robert Garcia, incoming House Oversight Committee Chair
The AI exposure
A Telegraph post on X said the two companies were on track to lose more than $130bn in market value "amid fears the Democrats' success in the midterm elections will derail the AI boom."
The infrastructure side is where that exposure sits. The Colossus and Colossus II data centers near Memphis lease computing power to customers including Anthropic. SpaceX reportedly plans to lift capacity to as much as 3 gigawatts by year-end, up from 1.7 gigawatts at the end of September, with 13 gigawatts in sight for next year.
Jake Dollarhide, CEO of Longbow Asset Management, framed the risk in regulatory terms:
"A Democratic sweep of Congress would put pressure on tech and potentially bring regulatory pressure on everything AI and possibly slow down the wild, wild west growth figures that we see daily and often take for granted"
The wider picture
The broad rally had its own drivers. Investors welcomed a divided government and lower Treasury yields, lifting the indexes while Musk's stocks fell. On the election itself, one expert argues that Musk's spending could not overcome higher utility, grocery and gas prices, suggesting the Republican losses reflected wider voter concerns and not his donations alone.
For market participants, the split is the signal. A rising index alongside falling Tesla and SpaceX shares points to company-specific political and regulatory risk, not a general retreat. The reported probes are the next development to watch.
