SpaceX and Tesla shares fall after Democrats win midterm races

Premarket declines after the election

Finbold reports that SpaceX and Tesla shares both dropped sharply before the market opened on Wednesday, November 4, after Democrats posted broad wins in the 2026 U.S. midterm elections. SpaceX closed the prior session at $141.31 and then fell to $131.85 in premarket trading, a 6.69% decline. Tesla moved from a previous close of $398.50 to $376.59, down 5.50%.

Finbold says the declines came even though the wider U.S. stock market reacted in a fairly positive way. That, according to the article, suggests investors were focusing on risks tied to Elon Musk’s businesses rather than on a general market sell-off.

Political shift and regulatory concerns

The article says the main trigger was Democrats’ control of both chambers of Congress, which raised concerns about closer scrutiny of Musk-related companies. Finbold reports that Musk has been a major donor to Republican candidates and that he reportedly gave more than $250 million to Republican-aligned groups in the third quarter of 2026.

According to the report, the election outcome may hurt Musk’s political interests and could leave his companies facing greater congressional oversight, especially on government contracts and regulation. Finbold notes that SpaceX has significant ties to government work through its rocket business and Starlink satellite network, while Tesla’s autonomous-driving operations create regulatory exposure. The article says investors may be pricing in tougher regulatory conditions.

Merger speculation adds uncertainty

Finbold also says uncertainty about a possible SpaceX-Tesla merger has added pressure. The article describes speculation about an all-stock deal and says investors are worrying about governance, valuation and possible shareholder dilution. It adds that the companies’ government relationships and national security implications could attract extra scrutiny.

XTB research director Kathleen Brooks said, according to Finbold, that Congress cannot directly stop a merger, but lawmakers could slow the process by increasing scrutiny. She also said the election outcome has introduced what she called a political risk premium into both companies’ valuations. For Tesla shareholders, Finbold says an all-stock transaction could create dilution risk depending on the valuation and exchange terms. The report adds that the voting structure of any combined company has also increased uncertainty. Finbold notes that no such transaction has been completed and that investors are weighing a possible deal without final terms.

SpaceX supply pressure and Tesla delivery worries

Finbold says SpaceX is also under selling pressure after restrictions on previously locked shares expired on October 22, making about 1.3 billion shares eligible for sale. The article stresses that this does not mean immediate selling will happen, but says the potential increase in supply has weighed on sentiment. It also reports that SpaceX has lost more than $400 billion in market value since October 6.

For Tesla, the article says political uncertainty adds to concerns about autonomous-driving regulation and softer delivery momentum. Finbold reports that a Democratic-controlled Congress could increase scrutiny of driver-assistance technology, while lower wholesale figures from Tesla’s Shanghai factory after September’s record output have raised concerns about near-term deliveries in China.