Is the Trump Administration Slamming the Brakes on SpaceX's Roaring Rebound?

Space Exploration Technologies (NASDAQ:SPCX), better known as SpaceX, has taken investors on a rollercoaster ride this summer. Its stock skyrocketed after SpaceX conducted the largest initial public offering (IPO) in history. Then came a brutal 46% plunge.

However, SpaceX began turning things around in early August. The artificial intelligence (AI) and space technology stock clawed back as much as 35% of its prior gains before momentum stalled. Is this only a temporary lull, or is the Trump administration inadvertently slamming the brakes on SpaceX's roaring rebound?

Image source: SpaceX.

Trump's triple-whammy of major macroeconomic moves

On Aug. 19, 2026, President Trump proclaimed that the U.S. would launch economic sanctions against Iran that he described as the "most crushing economic operation ever taken against any country." He stated in a Truth Social post that "this will be Economic Warfare and Isolation on an unprecedented scale."

Economic pressure on Iran is less worrisome to investors than an escalating military conflict. However, the president vowed that any country that helps Iran in nearly any way would also face economic consequences from the U.S. This statement created uncertainty about the full impact of Trump's economic war against Iran.

The White House also ignited a trade war with Canada, the second-largest trading partner for the U.S. Trump recently levied 50% tariffs on products imported into the U.S. from Canada, including automobiles. In response, Canada announced retaliatory tariffs of up to 50% on roughly $20 billion of U.S. imports to the country.

Adding to the uncertainty, Treasury Secretary Scott Bessent announced on Aug. 19 that the federal government will double the size of its long-term Treasury bond buybacks. Wall Street was skeptical about the move. Billionaire Stanley Druckenmiller, who was once Bessent's mentor, wrote in an op-ed article for The Wall Street Journal that the buybacks were a mistake and could damage the credibility of the U.S. Treasury Department.

How SpaceX is affected

What do these macroeconomic moves have to do with SpaceX's rebound losing steam? More than you might think at first glance.

First, a full-blown economic war against Iran (and any country that provides it with assistance) could lead to higher oil prices. Higher oil prices translate to higher inflation. And when inflation is higher, the Federal Reserve is more likely to raise rates rather than cut or hold them steady. Higher interest rates mean the discount rate investors use to value a company's future cash flows increases. Growth stocks such as SpaceX can get hit hard by the recalibration because much of their value hinges on expected future earnings.

One big impact of Trump's trade with Canada is that the U.S. imports steel and aluminum from its northern neighbor. Guess what materials are used to build SpaceX's rockets, boosters, and launch pads? Steel and aluminum are high on the list. The company's input costs will rise directly as a result of the president's tariffs. Higher costs pressure margins.

As for the Treasury bond buybacks, the story is more complicated. Bessent clearly hopes that repurchasing long-dated bonds will cause yields to decline. But while yields did dip initially, they quickly rose again. The key concern is that the federal government could lose credibility (as Druckenmiller argued in his op-ed). Such a scenario could lead to a "risk-off" market dynamic where stocks priced at a high premium (like SpaceX) get hammered.

Is SpaceX's rebound over?

To be clear, President Trump didn't target SpaceX or its founder, Elon Musk, when he decided to ratchet up economic pressure on Iran, pick a trade fight with Canada, and support his Treasury Secretary in a questionable bond buyback. However, SpaceX is nonetheless impacted by all three moves.

But is SpaceX's rebound over? Not necessarily. Tech companies continue to spend heavily on AI infrastructure, which is great news for SpaceX's AI business. Starlink's momentum remains exceptionally strong.

Still, stocks' trajectories are greatly affected by macroeconomic factors. Trump didn't intend to bring SpaceX's rebound to a screeching halt, but he just might do it anyway.

Keith Speights 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.