Hot carrier-induced spin dynamics is analyzed in epitaxial Au/Fe/MgO(001) by a time domain approach. We excite a spin current pulse in Fe by 35 fs laser pulses. The transient spin polarization, which is probed at the Au surface by optical second harmonic generation, changes its sign after a few hundred femtoseconds. This is explained by a competition of ballistic and diffusive propagation considering energy-dependent hot carrier relaxation rates. In addition, we observe the decay of the spin polarization within 1 ps, which is associated with the hot carrier spin relaxation time in Au.