Elon Musk lost nearly $500 million on a failed attempt to buy favorable outcomes in the 2026 midterm election. Now, Tesla and SpaceX have shed nearly $500 billion in combined market value as the companies find themselves among the hardest hit in a post-election selloff of tech stocks.
Tesla, which was in the red yesterday before the broader market downturn, has now fallen more than 14% over the last two days, wiping out nearly $220 billion off the company’s value. SpaceX has had it nearly as bad, slipping about 12.5% in the last 48 hours and resulting in about $240 billion getting lopped off the company’s valuation. The decline has also pushed the company’s share price below where it sat when it went public earlier this year.
If Musk would like to put a positive spin on the beating his companies are taking, he can claim to be ahead of the curve. While his companies went red on Wednesday, the rest of the market was surprisingly upbeat. According to CNN, the Dow had its best post-midterm election day in 44 years—presumably in part due to the market, which had been battered by Trump’s tariffs and the war in Iran, sensing some relief in its future.
That did not last, though. On Wednesday, the vibe had shifted—at least in the tech sector. According to CNBC, the Nasdaq entered correction territory as it dropped nearly 4%, and the S&P 500 and Dow Jones Industrial Average were down a couple of points.
That largely appears to be due to the fact that these indexes are so over-indexed on Big Tech, which is reckoning with the fact that its strategy of infinite spending might be coming to an end—a fact that is not necessarily tied to the election results, but was certainly punctuated by Tuesday night’s outcomes, including a near-unanimous rejection of data centers everywhere they were on the ballot.
Absolute slaughter.
Double digit losses for many AI companies. SpaceX 10% below IPO price, CoreWeave about to drop below its IPO price. Nvidia is down almost 10%
The AI industry’s day of reckoning may have finally come. pic.twitter.com/6S7mWPkzCY
— Gary Marcus (@GaryMarcus) November 5, 2026
There are some who see a silver lining in all that red. A portfolio manager suggested to Bloomberg that the election could give hyperscalers an excuse to scale back their commitments to spend hundreds of billions, if not trillions, of dollars on AI infrastructure. Rather than admit they’d overcommitted, they could blame the government for pumping the brakes. That might still be the case, but for now, the market seems determined to punish them anyway.
The downturn might also be related to news that at least some of the Democrats heading to Washington don’t plan on sitting on their hands despite having an adversarial president in the White House. A report from the Washington Sun claimed that some members of the Democratic caucus are preparing to launch probes into corporate America, with a particular target placed on Big Tech and AI firms. The goal, per the report, is to push CEOs out or secure restitution for American consumers who have been wronged by these companies.
Nothing Wall Street hates more than accountability.
