US futures rise on AI optimism and SpaceX IPO anticipation as yields hit one-year high
S&P 500 and Nasdaq futures climb as investors digest OpenAI’s IPO filing and SpaceX’s record-setting debut, despite persistent inflation concerns pushing two-year yields above 4.15 per cent.
US stock futures climbed on Tuesday, driven by sustained optimism in the artificial intelligence sector and anticipation of SpaceX’s initial public offering. The S&P 500 futures rose 0.4 per cent, the Nasdaq 100 advanced 0.7 per cent, and the Dow Jones Industrial Average moved up 0.2 per cent. The rally followed a modest rebound on Monday, with chip stocks such as Micron, Nvidia, and Broadcom leading gains. Micron Technology shares rose almost 4 per cent in premarket trading, building on their recovery from Friday’s slump.
The strength in the AI trade persisted despite growing concerns that persistent inflation could prompt the Federal Reserve to consider a rate hike this year. Yields on US two-year notes surged to their highest level in more than a year, trading around 4.15 per cent. This level sits well above the Fed’s current policy band of 3.5 per cent to 3.75 per cent, a divergence that began in March. The rise in yields was reinforced by job growth data that topped all forecasts, leading traders to price in at least one quarter-point rate hike as soon as October.
Geopolitical tensions between Israel and Iran eased slightly following an agreement to halt attacks, leading to a decline in oil prices. Brent crude slipped toward $93 a barrel, while West Texas Intermediate was around $90. Israeli Prime Minister Benjamin Netanyahu stated the country is holding fire against Iran for now but will respond should Tehran attack again. The flare-up in hostilities had previously threatened to derail efforts to end the war in the Middle East, prompting President Donald Trump to appeal for de-escalation.
Asian markets also posted gains, with South Korea’s Kospi surging 3.4 per cent after a previous slump. Japan’s Nikkei firmed 0.9 per cent, and Chinese blue chips added 0.4 per cent. Trade data showed that Chinese exports rose 19.4 per cent and imports climbed 27.4 per cent in May, beating median forecasts and highlighting China’s success in finding new markets despite US tariffs.
In corporate news, OpenAI and rival Anthropic have filed for IPOs, positioning themselves for potential trading this fall. SpaceX’s $75 billion offering remains oversubscribed, with institutional investors placing orders for about $10 billion or more of shares. The company is offering 555.6 million shares at $135 each, valuing the firm at approximately $1.8 trillion. Morgan Stanley hosted about 300 institutional investors for meetings with SpaceX management, including President Gwynne Shotwell and CFO Bret Johnsen.
Meanwhile, a leveraged ETF tracking SK Hynix plunged 27 per cent despite the underlying stock jumping 16 per cent, due to a lack of liquidity. The Korea Exchange identified three funds, including the KIM ACE ETF, as potential candidates for an investment warning. This divergence in net asset value and market prices has intensified scrutiny of the ETF manager, raising questions about structural vulnerabilities in such products.
