Why Redwire Stock Plummeted This Week

Redwire (NYSE: RDW) stock got hit hard this week, falling 17.8% across the stretch. Over the same period, the S&P 500 and the Nasdaq Composite each managed to gain 0.7% despite high levels of volatility.

Excluding SpaceX, the last week was generally a tough bearish stretch for space stocks. But even with a big valuation pullback in recent trading, Redwire's share price is still up 99% year to date.

Image source: Getty Images.

Macroeconomic and geopolitical news dragged Redwire lower

On Wednesday, the Bureau of Labor Statistics published May's Consumer Price Index (CPI) data -- providing the market with the latest round of key inflation data. While CPI inflation of 4.2% was in line with expectations, it still marked the highest level of inflation in three years -- and the picture got worse from there.

President Donald Trump said that the U.S. was on track to carry out big strikes on Iran, potentially escalating the conflict that has driven energy prices higher and accelerated inflation. News emerged later in the week that the U.S. and Iran were actually potentially on the verge of agreeing on basic terms to end the war, but geopolitical dynamics were still a significant source of bearish volatility last week.

SpaceX's IPO also had a negative impact on Redwire stock

SpaceX had its initial public offering (IPO) on Friday and rocketed higher out of the gate. The company's share price ended the day up 19.2%, pushing its market capitalization to roughly $2.1 trillion. While SpaceX had a successful IPO, the tech leader's public debut also had the effect of pulling investment dollars out of other stocks with exposure to the space industry -- and Redwire suffered a valuation contraction as a result.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.