Tesla and SpaceX Shares Slide as Democrats Take Congress and the Merger Path Gets Murkier
Tesla shares fell 5.6% before the market opened on November 4, 2026, and SpaceX stock was down 7.6% in early trading, according to MarketWatch. The declines came as Democrats won control of both the U.S. House and Senate in the November 2026 midterm elections, flipping both chambers from Republican control, according to CNBC.
Elon Musk's political spending is now part of the story. Musk spent at least $474 million supporting Republican candidates in the 2026 midterms, the New York Times reported. MarketWatch described investors in Musk's companies as worried about a less friendly climate for Tesla and SpaceX, in an article headlined 'Tesla and SpaceX shares slide as Musk's political push falls flat.'
The market's concern has a specific corporate link. SpaceX and Tesla are exploring a merger, the Times reported, and the same paper reported that a Congress controlled by Democrats could complicate such a combination. Reuters reported that Musk could gain majority voting control of a combined Tesla-SpaceX company through a merger, meaning more than half of the votes on company decisions. Neither company has announced a deal, so the market is pricing a possibility, not a transaction.
Texas also flipped blue in the November election, a result Reuters covered under the headline 'Elon Musk's business empire braces for Democratic wave as Texas flips blue.' Democrats also took seven Senate seats across red and battleground states, according to the Associated Press.
Tesla's governance calendar has been moving separately from the election. Governance is the set of rules and agreements that decide how a company is run and who holds power in it. On April 21, 2026, Musk entered into an implementation agreement with Tesla relating to the exercise of the 2018 CEO Performance Award. On October 19, 2026, Tesla filed a definitive proxy statement on Schedule 14A for its 2026 Annual Meeting, the formal document that sets out what shareholders will vote on.
In my view, the early moves are best read as a repricing of the governance path rather than a verdict on either company's operations. Premarket trading, the buying and selling before the official open, is thin, and a 5.6% and 7.6% decline before the open can reverse once the session deepens. What the numbers do show is that the market has started to attach a political discount to a merger that, so far, exists only as an exploration. For investors, the sharper question is how much of that discount reflects a legislative calendar a Democratic Congress could use to slow or shape a deal, and how much reflects Musk's own voting position in a combined company. Anyone quoting a precise figure for either should be asked for the method.
For now, the verified record is short. Democrats control both chambers, Musk's spending was large and one-sided, a SpaceX-Tesla merger is under exploration, and both stocks opened lower. What follows from them is still a matter of judgment.
