Tesla stock falls after the US midterms: what investors watch

What happened. On Wednesday, November 4, Tesla and SpaceX shares dropped while the tech-heavy Nasdaq composite climbed, AP reports. By the afternoon Tesla had lost about $40 billion of market value and stood at $1.54 trillion. SpaceX had also lost about $40 billion and stood at $1.83 trillion. Yahoo Finance reported that the S&P 500 rose 1.2% in early trading and the Dow added more than 1,100 points, while Tesla traded at $379 before the open, down 4.89%.

Thursday. Quartz reports that the slide went on in a broad sell-off led by AI, chip and other tech shares. Tesla fell as much as 10% in early trading and SpaceX lost 9.2%. Quartz says the two companies have shed more than $430 billion of joint market value since the election. Tesla is down about 22% for the year.

Why investors say it moved. First, Texas. Both companies are based there. Democrat Gina Hinojosa unseated Gov. Greg Abbott and has pledged to halt the building of new data centers, and SpaceX plans major data center investments, including one near Brownsville. Second, a possible merger. Quartz, citing Bloomberg, says the Democratic majorities cloud the outlook for a Tesla and SpaceX tie-up. Third, the AI trade. Joe Gilbert of Integrity Asset Management said the market is re-pricing the risk of a material slowdown in data center build-outs.

Politics and scrutiny. AP reports Musk spent at least $445 million to help Republicans keep Congress, and that Democrats are already talking about possible subpoenas and investigations. Joe Mazzola of Charles Schwab said worries about congressional investigations contributed to the early plunge. These are analysts' readings, and prices can move on many things at once.

What we don't know. Whether the drop lasts. Whether Congress opens any investigation. Whether the two boards go ahead with a merger, which Musk said would need the backing of 50% of all Tesla shareholders.

Confirmed facts

• On Wednesday, November 4, 2026, Tesla and SpaceX shares dropped considerably while the Nasdaq composite climbed.^[1]
• By Wednesday afternoon Tesla had lost about $40 billion of market value, standing at $1.54 trillion, and SpaceX had lost about $40 billion, standing at $1.83 trillion.^[1]
• The S&P 500 rose 1.2% in early trading on Wednesday and the Dow added more than 1,100 points.^[3]
• Tesla traded at $379 before the open on Wednesday, down 4.89%. SpaceX fell 5.67% to $133.30 in premarket trading, below its $135 listing price in June.^[3]
• Early on Thursday Tesla fell by up to 10% and SpaceX lost 9.2%, in a broad sell-off led by AI, chip and other tech shares.^[2]
• Quartz says Tesla and SpaceX have shed over $430 billion of joint market value since the election results. Tesla is down about 22% for the year.^[2]
• Gina Hinojosa unseated Texas Gov. Greg Abbott and has pledged to halt the building of new data centers. SpaceX plans major data center investments, including one outside Brownsville.^[2]
• Quartz, citing Bloomberg, says the Democratic majorities in Congress cloud the outlook for a possible Tesla and SpaceX tie-up. Musk said a deal would need the backing of 50% of all Tesla shareholders.^[2]
• Musk spent at least $445 million to help Republicans keep control of Congress, and Democrats in Congress were already talking about possible subpoenas and investigations.^[1]
• Joe Mazzola of Charles Schwab said worries about congressional investigations contributed to the early plunge.^[1]

Implications

• ConfirmedTesla and SpaceX shares fell in the days after the election, while the wider market rose on Wednesday.
• Our readingTexas data center rules and the merger review are the items that can move both stocks next. This is our view, based on the reasons investors gave.

Still unknown

• Whether the drop lasts
• Whether Congress opens any investigation into Musk's companies
• Whether the boards go ahead with a Tesla and SpaceX merger

Who it affects

Global. Anyone who follows Tesla or SpaceX stock or holds them through an index fund

Sources

1. AP: Elon Musk gambled $445 million to boost Republicans in the midterms and came up short November 5, 2026 · media
2. Quartz: Shares of Tesla and SpaceX sink as Musk's post-election rout worsens November 5, 2026 · media
3. Yahoo Finance (BeInCrypto): Tesla and SpaceX Stocks Fall as Investors Worry About Elon Musk's Political Risk November 4, 2026 · media
4. Yahoo Finance: SpaceX, Tesla stocks sink as analyst warns Democrats' victory will create 'major hurdles' for AI build-out November 4, 2026 · media