The Democratic midterm sweep threatens to complicate President Trump's "America First" agenda. Still, the biggest risk to the nation's industrial revival is at the state and local levels, as Democrats are set to push data center moratoriums.
At the state level, Democrats' sweep of Texas will likely deliver a particularly hard blow to Musk, who uprooted operations to escape California Democrats years ago. Now, Tesla and SpaceX are clear targets for Texas Democrats.
Lefty James Talarico was elected as Texas senator, and Gina Hinojosa was elected governor, making them the first Democrats to win either office in more than a generation. These Democrats have called for immediate AI regulation and a moratorium on data centers, and there will likely be immense state-level lawfare against Musk's Tesla and SpaceX empires.
Now official… Democrats just won every single statewide office in Texas:
— Geiger Capital (@Geiger_Capital) November 4, 2026
Senate
Governor
Lt. Governor
Attorney General
Land Commissioner
Comptroller of Public Accounts
Agriculture Commissioner
Railroad Commissioner
All 4 Supreme Court Justices
The market seems to have priced in this fate for Musk's empires, as Tesla and SpaceX are both down nearly 6% in premarket trading.
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