Market Participation Improves While Biggest IPO Ever Makes World's First Trillionaire

US stocks finished another week higher, with the S&P 500 rising 0.65%, after a brief technology-driven dip the prior week. It was a week that saw solid breadth with the equal weight S&P 500 index outperforming the S&P 500 again, this time by about 1.2%. The difference was big tech was mostly lower (names like Microsoft and Apple down 6.2% and 5.3%). Also, small caps performed quite well – the Russell 2000 index rose 3.90% for its best week since in two months.

Investors entered the week with a focus on inflation data and geopolitical developments, both which have recently altered the expectations for the economy and interest rates.

The biggest economic release of the week came from the consumer price index. While headline inflation figures remain elevated, they met expectations with inflation up 0.5% in the month (follows an elevated 0.6% and 0.9% increases the prior two months), and up 4.2% over the past 12 months. Roughly 60% of May’s increase in inflation was attributed to energy prices.

Core inflation, which excludes the more volatile food and energy components, rose 0.2% with the annual rate accelerating to 2.9%, back to the highest in a year. With inflation not coming in too far ahead of expectations, it helped calm some fears that the strong employment report, combined with a resurgence of inflation, would force the Fed into a more aggressive stance with rate hikes. The expectation is still one rate hike by the end of the year, but it was encouraging inflation was not as high as feared.

Technology and AI-related stocks somewhat found their footing after a sharp decline the week prior as markets looked past concerns surrounding Broadcom's outlook and instead focused on the continued wave of AI-related capital spending, the latest after Oracle’s earnings last week. Results were better than expected and markets appreciated it saying it was not raising more capital this year to fund its AI ambitions.

But by week’s end, attention shifted away from inflation and back to geopolitics with a focus on the situation in the Middle East. Military action picked up last week and after threatening a new round of strikes and taking over Iran’s Kharg Island – its major oil exporting hub that is responsible for about 90% of its exports – Trump said Iran’s leaders agreed to a deal that includes a 60-day ceasefire extension, a framework to address Iran’s uranium stockpile, and reopening the Strait of Hormuz, with Iran media claiming the deal includes the lifting of oil sanctions. This agreement was reportedly signed yesterday, which is sending markets higher as of this writing Monday morning.

If this holds, strategists are expecting oil exports to normalize by late summer which should turn into relief for gasoline prices by fall. Trump said over the weekend a deal will be signed by the start of the week and the Strait will then be opened. This is encouraging progress, but as we have seen several times already it is not over until it’s over.

One of the biggest headlines came Friday when SpaceX completed the largest initial public offering (IPO – when a private company sells its shares to the public for the first time) in history. The company raised about $75 billion and briefly reached a valuation of $2 trillion during its first day of trading. Its shares finished about 20% higher than the IPO price, highlighting the continued appetite investors have for transformative growth companies despite concerns around valuations and higher interest rate.

The debut of SpaceX also pushed Elon Musk’s net worth above $1 trillion, making him the first person ever to achieve trillionaire status (as founder, his stake in SpaceX is approximately $900 billion). Markets are now looking for other highly anticipated private companies to enter the public markets – like AI companies Anthropic (maker of Claude) and OpenAI (maker of ChatGPT). If that happens this year, 2026 will be one of the most active/largest years of IPOs in recent memory.

As we turn to a new week, focus shifts back to the Fed. This week includes a Federal Reserve meeting and its next policy decision, the first of Kevin Warsh’s term as Chairman of the Fed. No change in rates in expected this meeting, but markets will be focused on a potential shift in Fed thinking – Warsh has been critical of the Fed’s massive $6.7 billion balance sheet, pushed for a less forward guidance, and has a renewed focus on maintaining the Fed’s credibility on inflation.



Outside of the Fed, the week is expected to start strong after the extension to the ceasefire agreement with Iran and reopening of the Strait of Hormuz, followed by economic data on retail sales, while the earnings calendar enters a more quiet period until mid-July. 

Recent Economic Data



• Consumer Price Index: The consumer price index increased 0.5% in May, as was expected, which follows a 0.6% and 0.9% increase in the two months. As has been the case since March, energy has driven inflation higher, with the category up another 3.9% in the month. Over the past year inflation is at 4.2%, accelerating from 3.8% in April for the highest since 2023. Energy prices are up 23.5% over that period. It is not just energy though, core prices have been pushing higher recently - the core index, which excludes food and energy, was up 0.2% in May, but the annual rate accelerated to 2.9%, the highest in a year. Within core, prices in apparel rose 4.8%, transportation rose 4.1%, medical care rose 3.6%, and the largest category, shelter, rose 3.4% over the past year. Meanwhile, services prices increased 0.5% in the month and accelerated to a 3.7% annual rate, also back to the highest in a year.

• Producer Price Index: Wholesale inflation is rising at over double the pace of consumer inflation - the producer price index increased 1.1% in May, more than the 0.7% increase that was expected and follows a 1.1% increase in April. Of course, most was due to energy prices which increased another 10.7% in the month (following 10.4% and 7.5% increases the prior two). Core producer prices (excluding food and energy) rose 0.4% and are still rising at an above trend pace. The reason is that services prices have really accelerated this year, particularly transportation and warehousing. Wholesale prices are up 6.5% from a year ago, with core prices up 4.9%.

• Trade Balance: The US trade deficit in April was $55.9 billion, falling 1.2% from March. After a very volatile 2025 from the Trump tariff announcements, the deficit has leveled out in the mid-$50k range in 2026. Trade activity saw a solid improvement in April – exports increased 2.6% (or $8.3 billion) to $327.1 billion, while imports increased 2.0% (or $7.6 billion) to $383.0 billion. Year-to-date the deficit has decreased $213.5 billion, or 49.1%, a massive decline, but all due to last year’s tariffs that led to a spike in imports.

• Existing Home Sales: Sales of existing homes increased 3.2% in May to a seasonally adjusted annual rate of 4.17 million, up from 4.04 million in April. The sales pace has remained in a small range for about three years now, within 8% of 4.00 million, and much lower than the ~5.250 million pace pre-pandemic. Supply of homes remains a problem – in May there were only 1.55 million units for sale, up just 0.6% from a year ago. Sales figures represent closings, so these numbers mostly reflect contracts signed before mortgage rates moved higher in late April. The median sales price rose 1.3% from a year ago to $429,300.

• Jobless Claims: The number of jobless claims the week ended June 6 was 229,000, an increase of 4,000 from the prior week with the four-week average ticking up again to 219,000. The number of continuing claims was 1.795 million, up 24k from the prior week, with the four-week average up to 1.780 million.

• Consumer Sentiment: The consumer sentiment index ticked up 4 points to 48.9 in June with the report noting some consumers seeing relief with the early month easing in gas prices. Views of the current conditions improved somewhat, with the current conditions index rising 3.6 points to 48.4, while the expectations index rose 5.2 points to 49.3. The expected rate of inflation inched down to a still elevated 4.6%, while the longer-term expectation fell to 3.4% (from 3.9%). 

Company News



• Intel: Shares of Intel were higher after The Information reported Google and Nvidia are considering it as a backup manufacturer to Taiwan Semiconductor Manufacturing (TSM), as TSM struggles to keep up with demand. It added Google has ordered more than 3 million TPUs (its in-house developed Tensor Processing Units) from Intel. Nvidia has not yet placed an order but is testing if Intel’s technology can be used to make its advanced chips.

• Corning: Fiber optics maker Corning shares were up over 5% after it said it entered a multi-year, multi-billion dollar agreement with Amazon to increase US-based data center fiber optics manufacturing to strengthen the supply chain.

• Apple: At its annual Worldwide Developers Conference (WWDC), Apple unveiled a rebuilt AI-powered Siri and expanded Apple Intelligence across its products that had first been expected to launch last year. The company also introduced iOS 27 and macOS 27 "Golden Gate," with new AI-enhanced productivity, communication, and software experiences. It said its AI will be free to users, but some features will have daily limits, causing speculation this is the first step to monetizing its AI through premium iCloud subscriptions. Shares of Apple were down as its announcements were viewed as underwhelming.

• OpenAI: The Financial Times reported OpenAI is planning a major overhaul of ChatGPT ahead of its planned IPO, including a redesigned interface and broader AI capabilities that go beyond a traditional chatbot. The changes are part of a long-term effort to turn ChatGPT into a more comprehensive consumer platform. Separately, OpenAI said it confidentially filed for an IPO but they “expect it to leak so we’re just announcing it. We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

• Super Micro Computer: Super Micro shares fell over 10% after it announced it is proposing a series of equity raises totaling $7 billion to help it fund the purchase of components to satisfy the $39 billion in AI orders it has received in recent weeks for its advanced AI servers.

• Amazon: Shipping stock were lower after Amazon said it is expanding its freight and trucking operations by moving more transportation activity in-house through its Amazon Freight platform and partnerships with independent carriers. It will allow businesses to ship goods not only to Amazon facilities, but to third-party warehouses, distribution centers, and retail locations. This is a direct competition with shipping companies like UPS and FedEx.

• Eaton: Eaton announced it will separate and combine its Mobility Group with vehicle and machinery product company Dana, where the companies expect to see $250 million in annual synergies via the combination. Eaton shareholders will own 50.1% of the combined company while Dana shareholders will own 49.9% after the transaction, valuing Eaton’s business at $5.1 billion.

• Roku: Bloomberg reported streaming video platform Roku is in talks to sell itself, in talks with at least one media company about a potential combination. It says buyers see value a combination via Roku’s ability to reach and engage with a large share of viewers as more consumers cut cable packages. The news sent shares over 20% higher. 

Other News



• Social Security: The latest Social Security Trustees Report moved up the projected depletion date for the retirement trust fund to late 2032, one year earlier than previously expected, driven by demographic pressures, lower projected payroll tax revenue, and recent tax law changes. If Congress does not act before then, Social Security would still pay benefits, but only about 78% of scheduled amounts, resulting in an automatic benefit reduction of roughly 22% for retirees. The report also warned that Medicare's hospital insurance trust fund is projected to be depleted in 2033, reinforcing the growing urgency for lawmakers to address the long-term funding shortfalls.

• Rate Increases: The European Central Bank raised its policy interest rate by 25 basis points, the first rate increase in three years, as inflation has moved higher, saying the situation in the Middle East is generating inflationary pressures and there are a larger range of scenarios of how the shock could evolve and effect the medium term outlook. 

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