Tesla and SpaceX Fall More Than 6% in After-Hours Trading Following Texas Election
Key Facts
Tesla and SpaceX shares fell more than 6% each in after-hours trading on Tuesday, November 3, according to CoinDesk, as U.S. midterm election results emerged. The move followed a regular session in which Tesla closed at $398.50, compared with $403.82 on November 2, while SpaceX rose to $141.31 from $136.37. These figures show a divergence between regular-session performance and the evening drop reported by CoinDesk. The biggest political news was the Democrats’ gains in congressional seats, including seats in Texas. The state’s results drew attention to data centers, given their weight in U.S. infrastructure plans.
The Associated Press said Democrats won control of Congress and flipped at least 7 Senate seats, including a Texas seat. Democrat James Talarico won the Senate race against Republican Ken Paxton, the news agency reported. Gina Hinojosa also ousted Republican Gov. Greg Abbott, becoming the first Latina woman to serve as the state’s governor, according to the report. Democrats also won the lieutenant governor and attorney general posts. The agency described Texas as a fast-changing state with about 32 million residents. Democratic gains came amid voter frustration over rising prices and concerns about government corruption, the agency reported.
The Texas result matters to the data center sector because the state accounts for about 26% of planned U.S. projects, according to CoinDesk, citing Jefferies. Hinojosa had called during her campaign for a temporary halt to new data center construction, the report said. But the election result does not itself mean an immediate change in approvals for Musk’s projects. Abbott’s administration had directed the state’s environmental agency to pause data center permits until the Electric Reliability Council of Texas completed its review, with agencies to await information from the review before granting regulatory approvals. That makes energy and permitting an issue for companies dependent on computing infrastructure to monitor, while CoinDesk described Tesla’s and SpaceX’s direct exposure to the restrictions as less direct than that of infrastructure companies.
Nationally, major indexes posted mixed results in Tuesday’s session, with the S&P 500 up 0.4% and the Nasdaq rising 0.8%, while the Dow Jones fell 0.4%, according to the Associated Press. Stephen Brown, an analyst at Capital Economics, said the Democratic gains “do not change much in the near-term policy outlook.” He attributed this to Democrats lacking a Senate majority large enough to overcome a filibuster, while the president can also veto legislation. That assessment sets limits on what the election results may mean immediately for federal policy, despite the notable political shift in Texas. For Musk’s companies, the state’s permitting and energy issues remain a regulatory context to monitor alongside after-hours trading.
Musk had spent more than $475 million supporting Republicans in the midterm elections, according to CoinDesk, adding a political dimension to coverage of his companies and the state’s results. Abbott’s defeat comes just two years after Donald Trump won Texas by a double-digit margin, according to the Associated Press. The agency also described Hinojosa’s win as the first Democratic victory in the governor’s race since Ann Richards’ tenure in the 1990s. During the campaign, Hinojosa proposed a one-time payment of $1,500 to each of the state’s roughly 32 million residents, calling it a “corruption tax refund.” These promises and the political backdrop form part of the landscape after the vote, as race results and what they may mean for state policy drew market attention after Tuesday’s close.