Key insights
- Shares of Tesla and SpaceX are declining following the midterm elections, which saw Democrats retake both chambers of Congress. Investors may be concerned about increased scrutiny of Elon Musk's interests, particularly as a federal contractor with SpaceX. The election outcome could also introduce obstacles to a potential merger between SpaceX and Tesla.
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It will take some time to know for sure the stock-market winners and losers of yesterday’s midterm elections. Today, investors think one of the losers was Elon Musk.
Shares of both of his public companies were falling in Wednesday trading: SpaceX (SPCX) and Tesla (TSLA) were down more than 3% recently, in the wake of an election in which Democrats retook both chambers of Congress, establishing an empowered opposition to President Donald Trump during the second half of his term—and on a day when stocks broadly chugged higher.1
Musk, to be sure, remains the world’s richest person, with a net worth recently estimated at more than $870 billion.2 His influence is still massive, spanning touchpoints across the corporate, consumer and government sectors.
But investors may now wonder whether the shift of power in Washington could bring freshly intensified scrutiny of his interests. Some Democrats have said they would seek to investigate Musk in his role as federal contractor, notably given the role SpaceX plays in satellite-based connectivity. Market watchers now wonder whether a generally expected move to merge SpaceX and Tesla might hit more roadblocks—or, at least speedbumps; some had wondered whether he might have sought to announce a deal before the elections.
Musk donated heavily to Republicans in the midterms, according to reports, including some who lost—notably, in Texas, where some of his businesses are headquartered. One analysis pegged him as the top donor this midterm cycle, with spending of over $400 million. 3
“Guess my election-interfering space lasers didn’t work this time,” Musk wrote on social media. 4
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With today’s losses, Tesla shares are down 14% so far in 2026, making them the biggest decliner among Magnificent 7 stocks. SpaceX shares, which recently exchanged hands at $137, remain well below the $150 they started trading at in June after a record-setting IPO.