Tesla and SpaceX shares fall after Democrats take control of Congress

Tesla shares fell about 5% and SpaceX shares dropped 6.9% in pre-market trading on Wednesday after Democrats won control of both houses of Congress in the midterm elections, amid fears of tighter regulation of artificial intelligence and a potential merger between the two companies.

Shares of electric car maker Tesla fell about 5%, and shares of space and satellite company SpaceX dropped 6.9% in pre-market trading on Wednesday after Democrats won control of both houses of Congress in the midterm elections. The declines came after Democrats achieved a sweeping victory in the midterm elections, taking control of the House and Senate from Republicans, a result reflecting voter dissatisfaction with rising living costs and the war in Iran, two years after President Donald Trump returned to the White House. The Democratic gains in Texas dealt an additional blow to Musk, who made the state the main headquarters for Tesla and SpaceX and provided extensive financial and political support to Republican candidates. Vikram Rai of First New York said the broad Democratic victory could be a double blow to investors in both companies, given the potential for tighter regulation of artificial intelligence activities and regulatory hurdles to their potential merger.