SpaceX shares drop 10.8% on election and regulatory risks

SpaceX shares fell 10.8% in morning trading Thursday as investors weighed political and regulatory risks from Tuesday's midterm elections, in which Democrats won control of both houses of Congress and the Texas governorship. The election outcome threatens SpaceX's growth strategy, with Democratic-led committees potentially scrutinizing NASA and Defense Department contracts, and stricter antitrust review possible for the proposed SpaceX-Tesla merger. Texas' new Democratic governor has signaled increased oversight of large data center developments, where SpaceX plans most of its AI capacity. Analyst Daniel Ives noted the Texas data center plans are central to Musk's ambitions. China Renaissance initiated coverage with a buy rating and $194.20 target, while a Qualcomm 5G infrastructure deal provided partial support but failed to stem selling. The broader market offered no refuge, with the Nasdaq down 5.4%, S&P 500 down 3.6%, and Dow down 2.4% as investors reassessed divided government's impact on federal AI and tech spending. SPCX traded at $121.31, near its 52-week low of $104.83 and well below its high of $225.64, reflecting a repricing of risks tied to Musk's political exposure.