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.
With that, onto today's column.
