Investors are growing more hopeful that a peace deal between the United States and Iran could be close. The possible agreement would reportedly include the reopening of the Strait of Hormuz and the lifting of U.S. oil sanctions. 

By early Friday, the mood had shifted. Dow futures were up around 0.5%, while S&P 500 and Nasdaq futures were 0.3% and 0.1% higher, respectively. Oil prices fell sharply, with Brent and WTI both down more than 3%. Brent dropped below $90 a barrel, a level that carried psychological weight. Lower oil prices helped investors rethink the inflation threat and, by extension, the path of the Federal Reserve. 

Investors remain prudent, trying to decide whether this is a real turning point or just another optimistic headline with a short shelf life. Donald Trump said planned strikes on Iran had been canceled and that the final points of a deal had been approved by the parties involved. Reports suggested an agreement could be signed within days, possibly as early as this weekend or next week. Tehran, however, appeared more cautious, saying a final decision was still pending.

A reopened Strait of Hormuz would remove a major threat from oil markets and take pressure off global inflation. It would also calm fears that the Middle East conflict could spill further into trade, energy, and financial markets. But markets have been burned before by diplomacy that looked almost finished until it wasn't.

Still, the timing could hardly be better for investors. Friday is also the expected stock-market debut of SpaceX, the largest IPO ever by valuation and capital raised. Shares were priced at $135, valuing the company around $1.77 trillion and raising roughly $75 billion. If trading goes as some expect, SpaceX could quickly rank among the biggest listed companies in the United States. That is extraordinary.

SpaceX is arriving as a symbol: rockets, satellites, artificial intelligence, internet infrastructure, Elon Musk, and the promise of future industries that sound expensive because they are. Only a small portion of shares, around 3% to 4%, is expected to be available for trading, which could amplify the initial move. Scarcity has a way of turning investor judgment into appetite.

There will almost certainly be huge excitement. There may also be huge volatility. Some analysts are already warning that SpaceX's fundamentals are not as clean as the enthusiasm around the company. The business reportedly posted more than $4 billion in annual losses last year, and several of its technology and AI-related segments are still unprofitable. That does not mean the company is a bad investment, but it does mean the stock could trade more on belief than on near-term earnings.

The debut is also affecting the rest of the market. Some analysts believe investors have been trimming positions in high-flying AI and technology names to free up cash for SpaceX. That may help explain recent weakness in parts of the Nasdaq and even bitcoin. Semiconductor stocks bounced sharply Thursday after a rough stretch, but the broader technology rally remains under inspection. The Nasdaq 100 recently fell into correction territory, and the S&P 500 is still about 3% below its last record high.

Adobe's results show why the AI trade is more complicated than the market sometimes wants to admit. The company reported better fiscal second-quarter earnings and revenue and raised guidance, but its shares fell in premarket trading after news that its finance chief was stepping down and after investors focused on the pressure AI could place on its business model. Adobe is leaning into freemium AI offerings to expand its user base, but that strategy may come at the cost of short-term recurring revenue growth. In other words, even strong software companies are now being asked the same uncomfortable question: will AI help you, hurt you, or force you to explain yourself every quarter?

Today's economic highlights:

On today's agenda: in the United Kingdom, the 3-month average GDP, monthly industrial production, monthly manufacturing production, non-EU goods trade balance, monthly GDP, and goods trade balance; In the United States, the preliminary Michigan consumer sentiment index. See the full calendar here.

  • Dollar index: 99.817
  • Gold: $4,195
  • Crude Oil (BRENT): $88.48 (WTI) $85.54
  • United States 10 years: 4.45%
  • BITCOIN: $63,372

In corporate news:

  • Nvidia begins pitching its Vera CPU to Chinese clients.
  • SpaceX prices its IPO at 135 USD/share, raising 75 MUSD in what is the largest IPO ever, making Elon Musk the world's first trillionaire.
  • Exxon plans maintenance work at its Beaumont, Texas refining complex.
  • Alibaba said to offer $1.5 billion for grocery platform Pupu.
  • Marvell appoints Dan Durn, Adobe's finance chief, as new CFO.
  • Amgen taps independent research firm to reassess Tavneos safety data following liver failure concerns.
  • Uber Technologies faces potential tax implications in the UK after Britain's tax authority won an appeal in its dispute with Bolt over VAT classification.
  • Honeywell targets strategic acquisitions worth $2bn to $4bn to accelerate growth in industrial automation.
  • Lockheed Martin receives $514.4 million Air Force contract modification for space vehicles.
  • CME Group plans to expand 24/7 trading for WTI crude oil and gold.
  • Adobe raises its annual revenue guidance. The stock was down 2% in after-hours trading.
  • Astera Labs, Teradyne, CoreWeave, Nebius, and Rocket Lab will join the Nasdaq 100 on June 22. Charter Communications, Cognizant, Insmed, Verisk Analytics, and Zscaler are being removed from the index.
  • Dana is merging with Eaton's mobility division for $5.1 billion, driven by strong demand for auto parts.
  • WuXi AppTec files a lawsuit against the Pentagon after being added to China's military blacklist
  • Today's key earnings reports: Lennar Corporation

Analyst Recommendations:

  • Adobe Inc.: Stifel downgrades to hold from buy and reduces the target price from USD 350 to USD 200.
  • Kratos Defense & Security Solutions, Inc.: JP Morgan upgrades to overweight from neutral and reduces the target price from USD 99 to USD 82.
  • Boston Scientific Corporation: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from USD 90 to USD 65.
  • Casey's General Stores, Inc.: JP Morgan maintains its neutral recommendation and raises the target price from USD 719 to USD 975.
  • Kla Corporation: Morgan Stanley maintains its overweight recommendation and reduces the target price from USD 1900 to USD 190.
  • Zillow Group, Inc.: Goldman Sachs maintains its neutral recommendation and reduces the target price from USD 53 to USD 40.