Tema Space Innovators ETF, trading under the ticker NASA, experienced a sharp decline of 5.14% during intraday trading on Friday. The sell-off in the space-focused exchange-traded fund coincided with negative sentiment sweeping the broader space industry.

The downturn was triggered by news that Blue Origin's New Glenn rocket suffered an explosion during a ground test at its launch pad in Florida. The incident, which occurred during a hot-fire test, represents a significant setback for the company and its development of a new heavy-lift launch vehicle.

As a key contractor for NASA's Artemis program, which aims to return astronauts to the moon, Blue Origin's operational difficulties have raised concerns about potential delays to major national space initiatives. This event has prompted investors to reassess the near-term risks and challenges facing companies within the space innovation sector, leading to the pronounced decline in the thematic ETF.