The S&P 500 had a strong start but quickly stumbled and is now trading close to flat on the day.
The drop is in contrast to the Russell 2000, which is up 1.5%.
The market is dialing in on the SpaceX IPO tomorrow and there was an earlier Bloomberg report about $70 billion in retail orders. That’s almost enough alone to take down the entire IPO (just 4.2% of shares are being floated) and that initially boosted the market’s mood. Since then though, it’s turned.
Tesla has trimmed its gain to +0.6% and there obvious concerns about the war in Iran with Trump saying they will bomb the country again today.
The big loser is Oracle, which reported earnings late yesterday and is down 12%. For a megacap stock, it has been extraordinarily volatile in the past year.
Another loser is Microsoft, which is down 2.6% and closely trailed by Alphabet. There is some sense that some of the winners in the market are being sold to fund SpaceX trades but I think a better theory is worry about AI profitability and the returns on enormous AI investments.
Earlier we learned that OpenAI is planning to cut prices to fight for market share with Anthropic. That highlights the difficulty in making money with a product when switching is very easy.
On the winner side, shares of Caterpillar are up 3% after a 6% drop yesterday and mining stocks are strong, reflecting the better attitude about US and global growth that’s reflected in the Russell 2000. That’s a strange divergence given the Iran war worrise but oil is now down slightly on the day, perhaps on rumors of a deal to end the war.
One idea that’s circulating is that Trump will not want the war to spoil his June 14 birthday, where he will turn 80
