Key facts
- Tesla and SpaceX shares each fell about 15% over two days after the Democratic midterm sweep, per Business Insider.
- Ross Gerber told Business Insider the SpaceX-Tesla merger is now at risk because of volatility and high interest rates.
- Gordon Johnson of GLJ Research said any merger vote would play out while Democrats hold subpoena power.
- The iShares Semiconductor ETF was heading for its worst day since 2020, per Business Insider.
- The Nasdaq 100 dropped 6% into a formal correction during Thursday's session, per Business Insider.
- Texas is expected to account for up to 30% of data center development through 2030, per Business Insider.
Tesla and SpaceX shares each fell about 15% over two days after Democrats won control of Congress and governorships across the US in the November 2026 midterms, Business Insider reported on November 5, 2026. Elon Musk had spent heavily on the Republican midterm campaign, and the losses continued days after the vote, the report said.
Investors who had expected Democratic wins to favor electric vehicles and Tesla were overtaken by concerns about what the outcome means for Musk's companies, according to the report. Attention turned to a potential SpaceX-Tesla merger that the report described as a major driver of investor interest in 2026.
"I think that this merger is now at risk, and I think that it will be hard to complete with so much volatility and with high interest rates and and the lack of investment," Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, told Business Insider. Gerber, described by the report as a former Tesla bull and an outspoken Musk critic, said his firm holds a position in SpaceX through a previous stake in X.
Gordon Johnson, CEO of market research firm GLJ Research, told Business Insider: "The problem is timing and scrutiny. The plan was to announce in the first half of 2027 and close while Trump is still in office. Now any merger vote plays out while Democrats hold subpoena power over the Starshield/Ukraine throttling, DOGE, and SpaceX's related-party financing."
The report said Democrats could increase regulatory scrutiny of any merger talks or call Musk before Congress, citing reports that he recently limited Starlink service to Ukraine during its war with Russia. It also said Musk moved his companies' headquarters to Texas, where a Democratic governor is taking office.
SpaceX shares also fell with data center operators and AI infrastructure stocks on Thursday, according to the report. The iShares Semiconductor ETF was heading for its worst day since 2020, and the Nasdaq 100 dropped 6% into a formal correction during the session, the report said. The report said investors fear Democrats could tighten oversight of data centers, which would affect SpaceX's AI ambitions, and that the Democratic sweep included Texas and Georgia, states central to data center construction. Texas alone is expected to account for up to 30% of data center development through 2030, the report said.