Tesla and SpaceX Shed $456 Billion in Two Days as 'Musk Selloff' Deepens

Tesla and SpaceX have lost a combined $456 billion in market value over two trading days, a wipeout investors have branded the "Musk selloff." Tesla erased $216 billion in market capitalization and SpaceX shed roughly $240 billion, according to Dow Jones Market Data.

Shares closed down 11% for Tesla and 9% for SpaceX on Thursday. The slide reflects both broad technology-sector stress and new political risk following the 2026 U.S. midterm elections, in which Democrats took control of both the House and the Senate.

Elon Musk is losing paper wealth alongside ordinary shareholders. Forbes puts his net worth at about $789.5 billion, down 9% on Thursday alone. That figure has fallen by tens of billions in two sessions — a drop larger than the market cap of most S&P 500 companies.

Why did the midterms hit Musk's companies so hard?

Garrett Nelson, an analyst at CFRA, told MarketWatch that the Democrats' takeover of Congress is "compounding" fears around the massive artificial-intelligence spending plans of Tesla and other large technology companies. The concern is sharpest in states where the companies operate.

Nelson flagged Texas, where Democrats scored major victories and where both Tesla and SpaceX are headquartered. Tesla runs a supercomputing cluster in Texas, though SpaceX keeps its data centers in Mississippi and Tennessee.

Local opposition is already visible. Several newly elected Democrats, including Texas Gov.-elect Gina Hinojosa, have voiced opposition to new data centers. A few dozen data-center ballot measures went before voters this week, according to Redbud Consulting, and advocates won just one of them.

Not every Democrat is hostile. Texas Senator-elect James Talarico — whose Republican opponent Musk backed — told NBC he is a "big fan" of SpaceX and Tesla and would work with Musk on tech innovation in the state. Musk replied on X on Thursday: "Nice of him to say that."

The political friction could accelerate one of SpaceX's most ambitious bets. KeyBanc analyst Mike Leshock said opposition on the ground may push SpaceX to move faster on placing data centers in orbit, a goal central to the company's future valuation. Musk himself wrote Wednesday that space-based data centers were "looking pretty appealing right now."

How bad was the broader tech rout?

The damage extended far beyond Musk's companies. The Nasdaq-100 fell 6.4% and the PHLX Semiconductor Index dropped 12% on Thursday — the worst one-day declines for both since March 16, 2020, per Dow Jones Market Data.

Thomas Martin, a portfolio manager at Globalt Investments, said the pressure was especially severe for companies exposed to a slower U.S. data-center buildout, naming Dell Technologies and Seagate Technology among the big losers.

Nvidia lost $447 billion in market cap on Thursday, its second-largest one-day decline on record, according to Dow Jones Market Data. Sandisk was the worst performer in the S&P 500, per FactSet.

Is this about more than data centers?

Experts say part of the Tesla and SpaceX weakness stems from expectations of greater scrutiny of Musk himself. Musk deepened his ties to President Donald Trump and the Republican Party in recent years, led the so-called Department of Government Efficiency, and now works with the Defense Department. Several congressional Democrats have reportedly been preparing inquiries into him.

He was also the largest individual donor of the 2026 election cycle, spending $445.7 million, mostly on Republican candidates, according to OpenSecrets.

"The 'Musk selloff' is about the market repricing the risks that come with so much of the investment case being tied to one individual," said Jake Behan, head of capital markets at Direxion. The market, he added, must now weigh SpaceX and Tesla against a far less favorable political backdrop.

What happens to the Tesla-SpaceX merger idea?

The midterm result lands just as Tesla and SpaceX hold early talks to combine into a single company, likely controlled by Musk — a prospect some call "Elon, Inc." U.S. regulators and Congress could raise objections to folding Musk's two biggest companies under one roof, experts say.

"The bigger issue is the proposed Tesla-SpaceX combination," David Wagner, a portfolio manager at Aptus Capital Advisors, told MarketWatch by email. A "less-friendly Congress makes that path messier, even if it doesn't automatically block it."

If Democratic inquiries materialize and the merger talks advance, Musk's empire faces a two-front test: political scrutiny in Washington and a market that has stopped giving his companies the benefit of the doubt.