Democrats midterm wins hits Musk and tech stocks

Market reports that SpaceX fell more than 9% on Thursday and Tesla dropped more than 11%, according to market trading data, as tech and AI stocks crashed a day after the Democrats’ midterm wins.

According to reports, Nasdaq fell more than 5% at one point and the S&P 500 dropped 3.8%, market data showed.

Investors fear tougher scrutiny of data centre construction and the AI industry after Democrats won in key data centre states including Texas, BBC reports.

Musk had spent nearly $450m backing Republicans, including at least $45m for Ken Paxton in Texas, according to campaign finance records. Texas turned blue on Tuesday night, according to election results.

Texas governor-elect, Gina Hinojosa, pledged a moratorium on new data centre construction during her campaign.

Chipmakers were hit hardest, according to market data. AMD fell more than 14%, Micron fell as much as 17%, Intel was down more than 7%.

Susannah Streeter, chief investment strategist at Wealth Club, said fears that AI spending may not deliver returns are now colliding with fears of a slowdown in data centre construction.