Tesla and SpaceX shares fell after Republicans backed by Musk lost key Texas races, as investors weighed possible policy risks.
Tesla and SpaceX shares fell in early trading after Republicans backed by Elon Musk lost key Texas races to Democrats. CNBC reported SpaceX down about 4% and Tesla down 5% after the market opened Wednesday. Earlier premarket reports showed smaller declines, underscoring how prices shifted during the morning. The results raised questions about Musk’s Texas operations.
Texas election results go against Musk-backed candidates
Texas Secretary of State results, updated at 9 a.m. Wednesday with 99% of polling locations reporting, showed Democrat James Talarico leading Republican Ken Paxton in the Senate race. Democrat Gina Hinojosa also led Republican Governor Greg Abbott. The page showed about 5.4 million votes for Talarico and 4.2 million for Paxton. Hinojosa had about 5.2 million votes, compared with 4.5 million for Abbott.
Those were unofficial returns at the time of the update, not certified final totals. The New York Times and CNBC reported that Talarico defeated Paxton and Hinojosa defeated Abbott. Democrats also secured major national wins, according to CNBC. The results marked setbacks for the candidates Musk had backed in Texas.
Musk’s spending focused heavily on Texas
The New York Times estimated Musk contributed about $474 million to political groups during the 2025–26 cycle. It based its estimate on federal, state and other disclosed records. The newspaper estimated roughly $224 million went to Texas political efforts. About $212 million supported Paxton through direct contributions and America PAC spending, the newspaper reported. The figures may undercount spending because some donations were not publicly disclosed.
Musk’s backing did not ensure victories for Paxton or Abbott. The election result does not establish that Musk’s spending caused the companies’ share prices to fall. Instead, it shifts attention to what the winners may do in state and federal government. That distinction matters when separating election outcomes from investors’ interpretation of them.
Why investors are watching Texas policy
Tesla operates a major vehicle factory near Austin, and SpaceX launches rockets from its Starbase complex in South Texas. Both companies also have extensive Texas operations and expansion plans. CNBC reported that Hinojosa campaigned for tighter limits on data-center development, including a moratorium. She also called for changes to tax breaks and energy costs for data-center projects.
Those proposals could affect parts of Musk’s business plans, but they are not enacted policy. Republicans still control the Texas Legislature, CNBC reported, which could limit a new governor’s ability to change state law. At the national level, Democrats’ congressional gains could increase scrutiny of Musk’s companies and government ties. The New York Times reported that lawmakers had signaled interest in investigations.
Wedbush analyst Dan Ives said Musk “needs to find the path forward with Texas now,” Business Insider Africa reported. That was an analyst’s view of the political outlook, not a statement from Tesla or SpaceX. It does not establish how state officials will act.
Stock moves shifted across trading snapshots
The reported percentages depended on when outlets checked the market. The Wall Street Journal reported premarket declines of 3.6% for SpaceX and 3.5% for Tesla. The New York Times later reported Tesla down more than 4.5% and SpaceX down 5% before the opening bell. CNBC reported post-open losses of about 4% and 5%, respectively.
The New York Times said SpaceX shares briefly fell below their $135 June IPO price in premarket trading. That price is a reference point, not a guaranteed floor for later trades. These figures capture different snapshots, not one final daily result.
Musk responded to the political losses with an X post about SpaceX’s plans to put data centers in orbit. “Data centers in space looking pretty appealing right now.” — Elon Musk, Tesla and SpaceX CEO. The comment was a joke about a proposed business direction, not an announced shift in company strategy.
What the declines do and do not prove
The timing linked the share declines to election results, but it does not show the vote was their only cause. CNBC also reported broader investor worries about data-center construction and AI spending. Some major technology shares rose during the same trading period. That mixed movement suggests investors were assessing several issues rather than treating all technology companies alike.
Ultimately, Musk-backed candidates lost key Texas races as Tesla and SpaceX shares declined in early trading. The election could influence the policy environment, but proposals still need to become actual rules. Market prices may move again as investors assess those decisions. The companies’ next steps in Texas will show how much the political shift matters.
