SpaceX shares fall about 5% amid post-IPO pullback

SpaceX shares fell about 5% in early trading on Thursday as investors took profits after the stock’s rapid rise following last week’s record-setting IPO.

The decline came while U.S. benchmarks recovered from an earlier slump; the S&P 500 rose about 0.8%, the Nasdaq Composite about 1.0% and the Dow gained roughly 210 points. SpaceX has been volatile since the offering, which sold shares at $135 and quickly drew heavy buying.

Shares hit an intraday high near $225.64 earlier this week, roughly a 67% gain from the IPO price, before closing Wednesday at about $191.82 and extending losses on Thursday. At Wednesday’s close the company’s market value was near $2.52 trillion, putting it just under Amazon after briefly topping Amazon and Microsoft during the initial surge.

Traders pointed to profit-taking and technical flows common after large IPOs. The start of options trading, shifts in institutional portfolio positioning and moves among different investor groups can magnify price swings when a newly listed company’s traded share supply is limited.

Federal Reserve guidance and recent retail sales data also affected sentiment earlier in the week. The Fed left interest rates unchanged while indicating a possible rate increase later in the year. Retail sales figures showed weakness in discretionary spending.

Index rules may bring fresh demand. Recent changes allow large new listings to qualify for the Nasdaq-100 after 15 trading days, and FTSE Russell and MSCI have adopted similar timelines. Analysts estimate passive buying tied to index and ETF flows could add between $7 billion and $10 billion of demand.

Available supply remains constrained because many insider shareholders face lockup agreements that limit sales for months after the IPO. The small free float and potential index-driven inflows are factors market participants are watching.

Despite the pullback, the stock remains well above its IPO price. Trading in the coming weeks will be influenced by portfolio rebalancing, the pace of index inclusions and incoming economic and policy data.