U.S. stock index futures pointed modestly higher on Friday, signaling a cautious open after Thursday's sharp rally. S&P 500 futures rose 0.2%, while Dow Jones Industrial Average futures added 0.4%. Nasdaq 100 futures remained near the flatline, reflecting mixed sentiment ahead of a busy session dominated by the historic SpaceX IPO and sliding oil prices.
On Thursday, Wall Street posted strong gains, with the Dow surging 929.97 points, or 1.86%, to close at 50,893.42. The S&P 500 advanced 1.75% to 7,394.30, and the Nasdaq Composite jumped 2.54% to 25,809.66. The rally was fueled by easing geopolitical tensions and optimism around the SpaceX listing, but Friday's data injects a note of caution.
Oil Prices Tumble on Iran Deal Hopes
Crude oil prices fell sharply in premarket trading after reports that President Donald Trump called off planned strikes on Iran and hinted at a possible peace agreement that could reopen the Strait of Hormuz as early as this weekend. Brent crude dropped 4.22% to $86.57 per barrel, while West Texas Intermediate (WTI) crude slid 4.33% to $83.91 per barrel, marking the lowest levels for both benchmarks since April 17. Analysts at ING warned that oil could still spike if disruptions persist through late July. Tamas Varga of PVM Oil Associates noted that headline risk continues to drive the market.
SpaceX IPO: A Record-Breaking Debut
All eyes are on SpaceX as it prepares to begin trading on the Nasdaq. The company's initial public offering priced at $135 per share, raising $75 billion from 555.56 million shares and valuing the company at $1.77 trillion—the largest IPO in history. Trading may not commence until midday as the exchange processes orders. The listing is seen as a bellwether for upcoming AI-driven IPOs from companies like Anthropic and OpenAI.
Analysts are divided on SpaceX's valuation. Oppenheimer initiated coverage with an outperform rating and a $190 price target, with analyst Timothy Horan calling SpaceX the only vertically integrated AI company. However, Morningstar analysts value SpaceX at approximately $780 billion, less than half the IPO valuation, citing uncertainty around its AI and social media prospects.
Inflation Data Adds to Rate Hike Worries
The Producer Price Index (PPI) rose 1.1% in May, exceeding the 0.7% increase economists had forecast. On an annual basis, PPI jumped 6.5%, the largest gain since November 2022. John Ryding of Brean Capital commented that the Federal Reserve is missing its inflation target, and the latest PPI reading could push some policymakers to support a rate hike later this year. The data tempered some of the optimism from Thursday's rally.
Market Movers and Sector Action
In premarket trading, major ETFs showed positive momentum: the SPDR S&P 500 ETF (SPY) rose 0.61%, the Invesco QQQ Trust (QQQ) gained 0.51%, and the SPDR Dow Jones Industrial Average ETF (DIA) added 0.84%. Among individual stocks, Advanced Micro Devices (AMD) climbed 1.96%, Nvidia (NVDA) rose 0.62%, Tesla (TSLA) edged up 0.40%, and Alphabet (GOOGL) advanced 1.51%. On the downside, Micron (MU) slipped 0.77%, and Adobe (ADBE) dropped 4.71%.
Investors are advised to remain selective. While cheaper oil could ease inflation and support corporate margins, piling into AI, chip, or SpaceX names after a steep rally and hot inflation data carries risk. Jay Woods, chief market strategist at Freedom Capital Markets, warned that retail traders are the most vulnerable if momentum reverses, and suggested better entry points for SpaceX may emerge later.
Looking Ahead
The market will also monitor the University of Michigan's preliminary consumer sentiment survey at 10:00 a.m. ET. Economists expect the index to rise to 46.1 from 44.8, which would support a soft-landing narrative. However, inflation expectations within the report could have a greater impact, given the Fed's already strained patience after the PPI surprise.
