SpaceX Shares Slide as Rate Hike Fears Hit Valuations

SpaceX shares fell 16.4% on Monday, closing at $154.60, which is 23% below the peak reached after the company’s recent public listing at an $86 billion valuation just nine days earlier. The company, which now bundles Elon Musk’s space, artificial intelligence and social media businesses under one roof, is valued at about $2.18 trillion, down from a high of $2.5 trillion on June 16.

The drop came as U.S. Treasury yields jumped on expectations that the Federal Reserve may need to raise interest rates in the coming months to fight inflation. Higher yields on safer government bonds tend to hurt richly valued tech companies like SpaceX, which trades at more than 100 times trailing earnings. The Nasdaq fell 1.3% on Monday, while Google, Amazon and Broadcom each lost more than 4%.

Mike O’Rourke of Jones Trading told the Financial Times, “Everyone who wanted to buy SpaceX stock has already done it in the first few days, and it seems basically they are done.” Market expectations for a September rate hike rose after Fed chair Kevin Warsh last week promised to contain the inflation wave triggered by President Donald Trump’s war with Iran, while other Fed officials signaled a more hawkish outlook than expected. Nine of the 18 officials who submitted forecasts see higher rates by year-end, compared with none who expected a hike by March.

The two-year Treasury yield, especially sensitive to monetary policy expectations, rose 0.05% on Monday to 4.23%, its highest level in more than a year. Higher rates also make debt more expensive, and SpaceX is preparing to raise up to $20 billion in a bond offering that could begin this week to repay a $20 billion bridge loan taken in March, when Musk merged his AI company xAI and the X social network into the space business. SpaceX’s future valuation depends heavily on its AI arm, which lost $6.4 billion in 2025 but is pitched as targeting a total addressable market of $26.5 trillion. On Monday, SpaceX said it will provide computing resources at the Colossus 2 data center to startup Reflection AI, its latest deal in a series of AI partnerships. Similar agreements were signed with Anthropic in April and with Alphabet in early June, in a model resembling CoreWeave’s compute-rental business. Musk’s Grok chatbot remains less popular than OpenAI’s ChatGPT, Google’s Gemini and Anthropic’s Claude.