(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Mike Dolan
June 9 (Reuters) -
What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
Relief rally, dip-buying or a dead cat bounce? However you want
to characterize Wall Street's modest rebound on Monday, what is
clear is that it was concentrated in places you'd expect: tech
megacaps that have been in the vanguard of the AI boom.
Meanwhile, 60% of the S&P 500 ended in the red again yesterday.
As to Monday's individual movers, chipmaker Marvell Technology's
inclusion in the S&P 500 index helped its stock jump by 9%.
I'll get into that and more below.
But first, check out my latest column on whether AI could become
a public utility.
And listen to the latest episode of the Morning Bid daily
podcast. Subscribe to hear Reuters journalists discuss the
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BUY THE CHIP
Where does Monday's rebound leave us? It's hard to see past the
AI juggernaut with all the IPO hoopla in the background. Elon
Musk's SpaceX is due to list at the end of the week, and OpenAI
on Monday said it had also confidentially filed for an IPO. With
Anthropic also set to hit this summer, the market will be
absorbing an unprecedented amount of issuance.
Meantime, China's May trade data overnight showed it riding the
AI boom as its export growth blew past expectations, jumping
almost 20% year-on-year. This is thanks in large part to the
enormous demand for memory chips and tech equipment, but also
the soaring prices of those memory chips.
And that speaks to the flip side of this AI boom: the
potential inflationary fallout and how it complicates the
picture for the Federal Reserve and other central banks. An ECB
interest rate hike is believed to be nailed on for this week,
and the Bank of Japan is expected to move in that direction this
month too.
Over in the Middle East, Iran and Israel both indicated that the
latest round of missile exchanges had been halted for now. That
allowed oil prices to give back their early gains on Monday,
having risen as much as 5% earlier in the day, and took some of
the edge out of Fed rate-hike bets. That also helps explain
Monday's modest stock rebound.
On Tuesday, Asian stocks rallied and U.S. futures edged up
before the bell, while oil prices fell further. Today will see
the data diary tilt toward housing, while Wednesday will bring
the May U.S. consumer price release and results from Oracle
after the bell.
Chart of the day
SpaceX is this week planning to raise $75 billion in a debut
equity listing, targeting a $1.75 trillion valuation that would
place it among the top 10 most valuable U.S.-listed firms, even
though only 7% of its listed shares will be freely tradeable at
launch on June 12.
Although the sale is reportedly two times oversubscribed and has
earmarked as much as 30%, or $22.5 billion, for retail
investors, S&P Global last week shut out SpaceX from quick
inclusion in the S&P 500 after deciding it would not change its
criteria - including a rule that a company must be profitable.
Meanwhile, index provider MSCI confirmed on Monday it will apply
existing rules for early inclusion of large IPOs in its Global
Standard Indexes, likely clearing the way for SpaceX to join.
Today's events to watch
* U.S. April trade balance (8:30 a.m. EDT), May existing
home sales (10 a.m. EDT)
* U.S. 3-year note auction (1 p.m. EDT)
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Opinions expressed are those of the author. They do not reflect
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