Space Stocks Tumble as Blue Origin Explosion, SpaceX Valuation Cut Spur Selloff

Space stocks plunged on May 29, 2026, after Blue Origin’s static fire test ended in a dramatic explosion and reports surfaced that SpaceX cut its valuation target to $1.8 trillion from $2 trillion. The double blow reversed a rally sparked by SpaceX’s recent IPO filing. AST SpaceMobile (ASTS) tumbled 15% to post its worst session in over two years, retreating from Thursday’s record high. Rocket Lab (RKLB) lost 3%, Intuitive Machines (LUNR) fell 4%, Firefly Aerospace (FLY) shed nearly 6%, and Redwire (RDW) dropped over 5%. The Procure Space ETF (UFO) declined 3.7%. The selloff followed a Thursday evening accident at Cape Canaveral where Blue Origin’s test caused significant damage, raising concerns about delays for satellite deployments by AST SpaceMobile and Amazon (AMZN), which rely on the New Glenn rocket. Analyst Tim Farrar estimated AST’s commercial service could be pushed to 2028. SpaceX’s own Starship V3 ended with an explosion in the Indian Ocean last week, but the company said test objectives were met, limiting fallout. Jeff Bezos confirmed all personnel were safe and an investigation is underway.