Tesla and SpaceX shares drop as Democrats win control of Congress

Shares fall after Democratic gains

Moneycontrol.com reports that Tesla and SpaceX shares dropped as much as 6 percent in pre-market trading on Wednesday after Democrats swept Congress in the United States. The article says investors reacted to the political result by questioning the outlook for companies associated with Elon Musk, especially on regulation and government support.

Prices and market reaction

At around 6:15 pm IST, Tesla shares were trading at USD 375.75 on the Nasdaq, which was down 5.71 percent, according to the report. SpaceX shares were also lower, falling 5.67 percent to USD 133.30. The selling came even though broader US stock futures later rebounded sharply after early losses tied to the election result.

Regulation, AI and possible scrutiny

The article says one concern was the chance of stricter oversight for artificial intelligence. Both Tesla and SpaceX are expanding in AI, Moneycontrol.com reports, and a potential large merger between the two companies could also draw regulatory attention. The story also notes that access to a military version of SpaceX’s Starlink service has become a source of tension involving the US, Ukraine and Russia.

Musk's politics and business exposure

Moneycontrol.com says Musk has contributed nearly Rs 4,000 crore to Republican Party funds and used his social media platform X to urge his 240 million followers to vote against Democrats. The article says his close ties to US President Donald Trump and support for Republican candidates have made his companies more exposed to political shifts. It adds that Democrats’ statewide victory in Texas was a particular setback for Musk because both Tesla and SpaceX are based there and he has aligned himself with Republican politicians.

Past market moves and open questions

The report says SpaceX, which went public earlier this year, now ranks among the world’s most valuable companies and earns billions of dollars from US government contracts. It also says Tesla shares are up 34 percent since a late-July low, helped by optimism about its AI work and a possible tie-up with SpaceX. Moneycontrol.com notes that Musk-linked stocks have reacted strongly to elections before: Tesla surged more than 90 percent after Trump’s 2024 re-election, though those gains later faded as Musk’s relationship with Trump worsened and investors grew tired of his role in the Department of Government Efficiency, or DOGE. Musk joked on X, “Guess my election-interfering space lasers didn't work this time,” the article says.