Sputnik crisis
By 1957, the Atlas missile project was proceeding well, and the need for a nuclear upper stage had all but disappeared. On 2 October 1957, the AEC proposed cutting its budget. Two days later, the Soviet Union launched Sputnik 1, the first artificial satellite. This surprise success fired fears and imaginations around the world. It demonstrated that the Soviet Union had the capability to deliver nuclear weapons over intercontinental distances, and contested cherished American notions of military, economic and technological superiority. This precipitated the Sputnik crisis, and triggered the Space Race. President Dwight D. Eisenhower responded to by creating the National Aeronautics and Space Administration (NASA), which absorbed the NACA.