NEW YORK: SpaceX suffered a historic market setback as its valuation plunged by an estimated $400 billion in a single day, amid a broad sell-off in technology stocks driven by rising bond yields, interest rate concerns and investor unease over heavy spending on artificial intelligence.
According to market reports, shares of Elon Musk’s aerospace and technology company came under significant pressure as investors moved away from high-growth technology stocks.
SpaceX shares initially fell about 3% during trading before closing down 16.4% at $154.60. The sharp decline wiped out roughly $400 billion in market value, marking one of the largest single-day valuation losses ever recorded by a company.
The company’s stock has now fallen 31.5% from its record high reached following its $86 billion initial public offering on June 11.
As a result of the sell-off, SpaceX’s market capitalization dropped from a peak of nearly $3 trillion to approximately $2.03 trillion.
Market analysts attributed the decline to rising U.S. Treasury yields, which have increased expectations that the Federal Reserve could raise interest rates in the coming months to combat inflation. Higher borrowing costs typically weigh on technology companies whose valuations are tied to future growth expectations.
Investors have also expressed concerns about the substantial capital being directed toward artificial intelligence projects, prompting renewed scrutiny of technology sector valuations.
Despite the sharp losses, SpaceX shares recovered about 2.4% in later trading as some investors moved to buy the stock at lower prices. However, analysts said concerns over interest rates and AI-related spending continue to pressure the broader technology market.
