Can you turn a material or texture into a static mesh i have made a 2d spacecraft on Photoshop and have no idea how to turn it into a static mesh?
You must have a 3d program like Maya, 3dsmax or blender to model with. A mesh is a model that has verticies that define a shape in 3d space. Photoshop cannot generate these.
On the other hand if 2d is what you want then go old school and apply the Photoshop texture to a plane. If you use the alpha channel to black out the edges of the texture you won’t see the plane, just the texture.
Easier way would be to create sprite from the texture. You can use that like a static mesh.
Cheers 
I have access to 3ds max do I have to save it as a certain file format in order to make it as a static mesh?
Can you tell us a bit more about the intention behind, converting a 2D texture into a Static Mesh ? If you are looking at making a 2D game, then the approach might differ.
In anycase, one of the simplest way would be apply the spaccecraft image as a texuture to a plane in 3dsmax and export it as FBX and then import it to Unreal.
Here’s the documentation to give you much better idea about this:
https://docs.unrealengine./latest/INT/Engine/Content/FBX/StaticMeshes/index.html
Hope this helps.
Unreal needs this to make the workflow faster. I might actually dive into an editor plugin to provide this as it would greatly improved my 2D Skeletal System workflow.
https://www.unrealengine.com/marketplace/en-US/product/2d-skeletal-system