[New York Stock Exchange] Ceasefire MOU Imminent... S&P 500 and Nasdaq Slightly Down

Market Focuses on SpaceX Listing

As markets await the details of the U.S.-Iran ceasefire memorandum of understanding (MOU) and the announcement of SpaceX’s first public offering, the three major New York stock indexes showed mixed performance on June 12 (local time).

As of 10:44 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was up 222.71 points (0.44%) to 51,071.46 from the previous trading day. The large-cap S&P 500 Index was down 2.30 points (0.01%) to 7,393.26, while the tech-heavy Nasdaq Index had fallen 92.08 points (0.35%) to 25,718.96.

New York Stock Exchange. New York, USA – Special Correspondent Yoonju Hwang

Iranian media reported that the draft memorandum of understanding between Iran and the United States includes a U.S. commitment to lift oil sanctions and an Iranian promise to reopen the Strait of Hormuz. Foreign news outlets reported that the two countries could sign a peace agreement as early as June 14 in Switzerland.

Market attention is focused on the Nasdaq listing of SpaceX, led by Elon Musk. Set to trade under the ticker symbol SPCX, SpaceX has fixed its share price at $135, giving it a historic corporate valuation of $1.77 trillion.

SpaceX plans to sell 555.6 million shares to raise $75 billion. If the initial public offering (IPO) proceeds as planned, CNBC reported that it could be a major catalyst for the stock market on Friday.

Several space-related stocks declined ahead of the IPO. Rocket Lab was among them, with its share price falling by 9%.

Some market participants are concerned that the sheer size of this public offering could put pressure on the market. Even if the market digests the new SpaceX shares, they argue that volatility from the IPO could be significant. As a result, there is a possibility that a shift in leadership within the tech stock sector could be triggered once again, as investors may realize gains to secure capital for investing in SpaceX.

Douglas Beath, global equity strategist at Wells Fargo Investment Institute, analyzed, "Historically, large IPOs tend to occur when market sentiment is strong, but excessive share supply can also lead to indigestion." He added, "Since households' allocation to equities is already near an all-time high, investors may sell existing holdings to raise funds for new investments like this IPO."

He continued, "Ongoing geopolitical tensions, combined with the upcoming midterm elections, could be another reason for increased volatility in the market in the second half of the year."

However, Douglas Beath added, "Although I remain positive on artificial intelligence (AI) themes and the information technology (IT) sector, I would not chase the current rally."

This content was produced with the assistance of AI translation services.