Traders at the New York Stock Exchange experienced a slight uptick in U.S. stock futures on Thursday night as they prepared for an eagerly anticipated event: the historic initial public offering (IPO) of SpaceX scheduled for Friday. S&P 500 futures rose approximately 0.2%, while Nasdaq 100 futures mirrored this increase. Meanwhile, futures linked to the Dow Jones Industrial Average saw a gain of 59 points, or 0.1%.
The stock market enjoyed a rally on Thursday, buoyed by a resurgence in semiconductor stocks and remarks from President Donald Trump suggesting that the U.S. and Iran were close to signing a peace agreement. The S&P 500 climbed by 1.75%, the tech-heavy Nasdaq Composite surged 2.54%, and the Dow Jones Industrial Average enjoyed a remarkable increase of 929.97 points, or 1.86%.
In Asia, stocks mirrored the positive sentiment, with South Korea’s Kospi advancing by 7.01% on Friday, Japan’s Nikkei 225 climbing 3.4%, and Australia’s benchmark S&P/ASX 200 rising by 1.54%. Trump’s comments in the Oval Office indicated that a deal with Iran was imminent, noting that the documents were nearing finalization and that it should be concluded “pretty quickly.” He emphasized that the agreement would ensure that “Iran will never have a nuclear weapon.” Earlier in the day, Trump had also stated on Truth Social that he had canceled planned military strikes on Iran.
As traders turned their attention to SpaceX’s public debut, the company was set to list under the ticker symbol SPCX with a fixed share price of $135, targeting a staggering valuation of $1.77 trillion. The plan involves selling 555.6 million shares, which could generate a $75 billion fundraise—potentially the largest IPO in history, surpassing Alibaba’s $22 billion offering in 2014.
The enormity of this IPO has sparked concern among some investors regarding its potential impact on the market. They worry that the substantial increase in equity supply could lead to market volatility, particularly given the historical tendency for large IPOs to coincide with robust equity market sentiment. Wells Fargo Investment Institute’s global equity strategist, Douglas Beath, indicated that current household equity exposure is near an all-time high, which could push investors to liquidate existing holdings to finance new positions in SpaceX. He noted ongoing geopolitical tensions and impending midterm elections could also contribute to market volatility in the latter half of the year.
Beath expressed cautious optimism regarding the AI theme and the Information Technology sector, recommending against chasing the recent market surge. As of late May, the tech sector had gained 37% since April, while the S&P 500 rose by 17% during the same period.
The rally on Thursday positioned the S&P 500 and Nasdaq Composite back into positive territory for the week, suggesting potential week-over-week increases of 0.14% and 0.39%, respectively. However, the Dow was poised to close the week slightly lower, with an anticipated decrease of 0.04%.
Looking ahead, investors will be closely monitoring the preliminary reading of the Michigan Sentiment index for June, set to release on Friday morning. This key economic indicator may provide further insights into consumer confidence amid the shifting economic landscape.
