I caught the moment the screens went from cautious green to blunt red. By the close, Tesla and SpaceX had shed nearly $500 billion in combined market value (about €460 billion). Traders muttered; portfolio managers closed laptops and counted the losses.
I want to give you a clear line through the chaos so you can judge what matters and what’s theater. You’ve seen the headlines—now let’s pull apart the numbers, the narratives, and the likely next moves.
On the tape, Tesla plunged more than 14% over two days.
Tesla dropped over 14% in the last 48 hours, erasing about $220 billion from its market cap ($220 billion; €202 billion). SpaceX slid roughly 12.5%, knocking off about $240 billion ($240 billion; €221 billion) and dipping below its IPO price earlier this year. That pace of loss turns balance sheets into rumors, and investor confidence into short-term math.
I’ve watched volatile rallies before, and this one feels different: the market isn’t just repricing growth—it’s taxing promises. If you held Tesla or SpaceX stock yesterday, you know the gut-punch of watching expectations recalibrate in real time, like a sandcastle at high tide.
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
Why did Tesla and SpaceX stock drop after the midterms?
Markets moved for a few overlapping reasons. The Dow initially rallied—CNN reported its best post-midterm day in 44 years—while the Nasdaq and AI-heavy indexes swung the other way. CNBC noted the Nasdaq slid nearly 4%, entering correction territory, and investors suddenly treated Big Tech’s heavy spending on AI and infrastructure as a liability, not an asset.
Here’s the short version you can act on: investors are re-evaluating what endless capital deployment buys when policy and politics shift. A Bloomberg-sourced portfolio manager even suggested the election gives hyperscalers an excuse to pare back multibillion-dollar commitments. That’s not a conspiracy; it’s a pivot in incentives, and markets tend to punish culprits before they admit mistakes.
On the morning after, the Dow celebrated while tech sank.
Wednesday opened with a split personality: broad-market optimism versus tech-specific fear. While the Dow’s bounce reflected relief on tariffs and geopolitical worries, Big Tech—overweighted in the S&P and Nasdaq—was suddenly paying for past growth bets.
I’m not saying the election alone caused the rout. What changed was the narrative: Tuesday night’s outcomes made long-term, expensive bets on AI infrastructure politically and economically riskier. CEOs and boards now face the dual threat of market correction and regulatory heat, a scenario where strategy looks like a liability and spending like stubbornness.
Will Musk’s companies recover after the selloff?
Short answer: maybe—but not automatically. Recovery depends on fundamentals, earnings cadence, and whether Musk’s firms can persuade markets that growth remains intact. Add a political element: reports say some incoming Democrats are preparing probes into Big Tech and AI, aiming to hold CEOs accountable or extract restitution. Wall Street doesn’t welcome the smell of oversight.
For you as an investor or watcher, that means volatility will stick around. Expect headlines, hearings, and company statements. Platforms such as Nvidia, CoreWeave, AWS, Azure, and Google Cloud will be watched for spending signals; their moves will ripple across related stocks.
On trading desks, managers are recalculating AI budgets and boardroom risk.
Portfolio managers told Bloomberg that the midterm results give companies cover to pull back on multibillion-dollar AI infrastructure commitments. That’s not just a story about money—it’s about political optics and shareholder patience. When the spending narrative flips, companies face pressure from two directions: markets demanding returns and lawmakers demanding answers.
If you want to watch the next moves, follow cloud providers and GPU demand indicators. Nvidia’s swing matters; so do smaller infra plays like CoreWeave and the capital plans of AWS, Azure, and Google Cloud. This moment is a re-price of ambition, and markets often act like a pressure cooker releasing steam.
How much did Elon Musk lose on his reported midterm wager?
Reports say Musk lost nearly $500 million on an attempt tied to the midterms ($500 million; €460 million). That’s a headline-grabbing sum, but it’s dwarfed by the near-$500 billion hit to Tesla and SpaceX market caps combined (about €460 billion). The personal loss is painful; the market-cap losses reflect a larger re-rating of future expectations.
I’ll leave you with this: the selloff isn’t just about one man or one election night—it’s a reckoning for an era of ever-larger bets paid for with ever-higher valuations. Are we watching a healthy market correction or the start of a longer punishment for Silicon Valley’s faith in infinite spending?