Wall Street experienced a moderate recovery Monday, though the gains were largely limited to the technology sector’s biggest players leading the artificial intelligence revolution. Despite the uptick, more than half of S&P 500 companies still closed lower for the day.
Among Monday’s standout performers, Marvell Technology saw its shares surge 9% following news of its addition to the S&P 500 index.
The market faces significant developments ahead, with several major AI-focused companies preparing to go public. Elon Musk’s SpaceX plans to debut later this week, while OpenAI announced Monday it has submitted confidential paperwork for its own public offering. Anthropic is also expected to launch this summer, creating an unusually heavy wave of new stock offerings.
China’s trade figures released overnight revealed the country benefiting from AI demand, with exports climbing nearly 20% compared to last year. The growth stems largely from strong demand for memory chips and technology equipment, along with rising prices for those components.
This AI expansion brings concerns about potential price increases that could complicate decisions for the Federal Reserve and other central banks. Market watchers expect the ECB to raise interest rates this week, with the Bank of Japan likely following suit this month.
Tensions in the Middle East appeared to ease as both Iran and Israel suggested their recent missile exchanges had paused. This development allowed oil prices to retreat after climbing as much as 5% earlier Monday, also reducing expectations for Fed rate increases and contributing to the stock market’s recovery.
Tuesday brought continued gains in Asian markets and slight increases in U.S. futures trading, while oil prices dropped further. Housing data headlines Tuesday’s economic calendar, with May consumer price information and Oracle’s earnings report due Wednesday.
SpaceX aims to raise $75 billion in its stock market debut this week, seeking a $1.75 trillion valuation that would rank it among the ten most valuable publicly traded U.S. companies. However, only 7% of shares will be available for regular trading when it launches June 12.
Despite reportedly attracting twice the intended investment and reserving up to 30% of shares for individual investors, S&P Global excluded SpaceX from immediate S&P 500 consideration last week, maintaining its profitability requirement. However, MSCI confirmed Monday it will apply existing guidelines for including large new public companies in its Global Standard Indexes, potentially opening the door for SpaceX inclusion.
Tuesday’s key economic events include April trade balance figures at 8:30 a.m. and May existing home sales data at 10 a.m., along with a 3-year Treasury note auction at 1 p.m.
