This week, a barrage of events—including SpaceX’s IPO debut, Oracle’s earnings report, and additional inflation data—will severely test traders’ psychological resilience.
Investors are entering a new week with heavy hearts after Friday’s broad market repricing, which reflected bets that the Federal Reserve will hike interest rates this year. Friday’s panic triggered sharp declines across all three major U.S. equity indices. This week, SpaceX’s IPO debut,$Oracle (ORCL.US)$earnings reports, the latest escalation in tensions between Iran and Israel, and further inflation data releases will collectively pose a severe test of traders’ psychological resilience.
Last Friday,$S&P 500 Index (.SPX.US)$plunged 2.6% at the close, leaving its weekly loss also fixed at 2.6%. Meanwhile,$Dow Jones Industrial Average (.DJI.US)$fell 1.4% on Friday, ending the week down 0.6% overall. The worst performer among the three major indices was the tech-heavy$Nasdaq Composite Index (.IXIC.US)$, which suffered a bloodbath on Friday, plunging 4.2% and resulting in a five-day cumulative drop of 4.7%—a decline exceeding 1,000 points.
Key Focuses for the Week
As the week begins, all eyes will be squarely on Friday—when$SPACE EXPLORATION TECHNOLOGIES CORP (SPCX.US)$, led by Elon Musk, will officially list on the stock exchange, an event destined to become the largest IPO in history. At the public offering price of $135 per share, the rocketry, aerospace, and communications giant will be valued at approximately $1.78 trillion.
On the corporate earnings front,$Oracle (ORCL.US)$Oracle’s fourth-quarter fiscal earnings report, due Wednesday, will headline this week’s market developments, serving as another critical barometer for assessing the current state of artificial intelligence (AI) and cloud computing sectors. Additionally,$Adobe (ADBE.US)$will also be released on Thursday.
Following last week’s unexpectedly robust nonfarm payrolls report, investors this week must brace for another wave of key economic data releases. Inflation—the second pillar of the Federal Reserve’s dual mandate (maximum employment and price stability)—will take center stage.
The spotlight will fall on Wednesday’s Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics (BLS), which will clarify for investors exactly where and how inflation is manifesting in consumer prices. This will be followed closely by Thursday’s Producer Price Index (PPI) report, offering insight into price trends for inputs—such as raw materials—purchased by manufacturers and other producers.
The latest direct conflict between Iran and Israel has further complicated prospects for a U.S.-Iran agreement, likely keeping inflation expectations elevated. On the evening of July 7, the commander of Iran’s Khatam al-Anbia Central Headquarters issued a statement warning Israel to immediately halt attacks on southern Lebanon and the southern suburbs of Beirut, or else Iran would respond with stronger actions against Israel and its supporters. President Trump has already received a briefing on the escalating situation between Israel and Iran.
In an interview on the 7th, Trump said that Iran’s missile strike against Israel earlier that day was 'not helpful for negotiations' and urged Iran to return to the negotiating table. Trump stated, 'My advice to Iran is this: You’ve already launched your missiles—that’s enough. Come back to the negotiating table and reach an agreement.'
Wrapping up the week will be the University of Michigan’s bi-monthly survey on U.S. consumer sentiment and inflation expectations. Amid deep pessimism among Americans about the current state of the economy, the overall consumer sentiment index plummeted to a record low of 44.8 in May. Economists expect Friday’s reading to show a slight rebound to 46.
Renewed Middle East Conflict Pushes U.S.-Iran Deal Further Out of Reach
Oil prices surged after Iran launched several missiles at Israel, placing a fragile ceasefire agreement in jeopardy and stalling negotiations aimed at ending the war.
$Brent Last Day Financial Futures (AUG6) (BZmain.US)$prices surged as much as 3.6% to $96.47 per barrel, while$Crude Oil Futures (JUL6) (CLmain.US)$prices also briefly approached $94 per barrel before paring gains. An Iranian military advisor told the media that the attack served as a warning for Israel to 'cease hostile actions in Lebanon.' The Israeli military intercepted all missiles, with no reports of casualties.
U.S. President Trump has been briefed on the escalating situation between Israel and Iran. In an interview on the 7th, Trump stated that Iran’s missile strike against Israel earlier that day 'does not help negotiations' and urged Iran to return to the negotiating table.
Trump said, 'My advice to Iran is: you’ve already fired your missiles—that’s enough. Come back to the negotiating table and reach an agreement.' He also noted that U.S. forces are on high alert.
Regarding Israel’s earlier attack on Beirut, Lebanon, on the same day, Trump remarked, 'I’m unhappy about this matter.'
Trump also stated that he would immediately call Israeli Prime Minister Netanyahu to tell him not to retaliate. He added that a final agreement between the United States and Iran was 'within reach' and that he did not want 'the current events to derail the deal.'
Bracing for Impact: An Epic IPO Frenzy Arrives
If all goes smoothly on Friday, Elon Musk’s$SPACE EXPLORATION TECHNOLOGIES CORP (SPCX.US)$will debut on Nasdaq at $135 per share. The public offering would value the company at approximately $1.8 trillion and very likely make Musk the world’s first trillionaire.
For investors, this IPO raises two major questions. The first, distilled to its essence, is: What exactly is SpaceX’s core business? Although the company is widely recognized for its breakthroughs in rocket technology and its Starlink satellite network, SpaceX has actually placed its largest market bet on artificial intelligence—one facet of Musk’s ambition to dominate the emerging frontier of 'space-based data centers.'
According to the company’s own figures, SpaceX’s AI business line accounts for over 90% of its estimated total addressable market (TAM) of approximately $28.5 trillion. Thomas Siap, head of equity research at LPL Financial, noted that placing such enormous stakes on technology that has yet to be thoroughly validated by the market could lead investors on a bumpy ride.
Hypes stated, 'The world certainly needs ambitious companies that continually push the boundaries of human possibility—but the journey from Earth to the stars may prove too turbulent for some.'
Moreover, this IPO will pose a severe test to one of the core pillars of the U.S. stock market—index funds.
The Nasdaq exchange, where SpaceX is set to list, has recently relaxed restrictions over the past few months, shortening both the required public trading period and the minimum number of freely tradable shares needed before a stock can be included in the benchmark Nasdaq-100 Index. This move clears the path for SpaceX to be swiftly added to the index within weeks of its listing—forcing all index-tracking fund managers to aggressively buy the stock in the market.
In contrast, S&P Dow Jones, the other major U.S. index provider, has declined to amend its eligibility criteria, meaning SpaceX would need to wait significantly longer before qualifying for inclusion in the S&P 500. This policy divergence between the two benchmark indices is expected to trigger a major rebalancing of market capital flows.
Strong labor market, persistent inflation
If last Friday’s nonfarm payroll report fully dispelled any lingering doubts about the underlying strength of the U.S. labor market, then the data releases scheduled for the coming week will directly address the other half of the Federal Reserve’s dual mandate: inflation.
In a report widely interpreted by markets as “surprisingly strong,” the U.S. Bureau of Labor Statistics announced last Friday that the U.S. economy added 172,000 new jobs—far exceeding the prior estimate of 88,000. Markets reacted sharply, fully pricing in an expectation of at least a 25-basis-point interest rate hike by year-end. This aligns with a growing consensus in the market: given the robust labor market and persistent inflation, the Federal Reserve’s next move is likely to be a rate increase.
Wednesday’s consumer price data and Thursday’s producer price data are likely to reinforce this hawkish outlook, as lingering effects from the Iranian oil shock continue to keep prices elevated—and energy costs may already be spilling over into so-called “core” inflation. Economists expect headline CPI to rise 4.2% year-over-year in May, up from 3.8% in April, while core CPI is forecast to climb to 2.9% from April’s 2.8%.
James Egho, Chief U.S. Economist at BNP Paribas, noted last Friday, 'With inflation now approaching 4%, monetary policy is effectively more accommodative than anticipated on a real interest rate basis. Moreover, given the economy’s remarkable resilience, the need for cyclical stimulus appears far less urgent than policymakers previously assumed.'
"This year’s strong growth, progressively tightening labor market, and persistently high inflation appear, in our view, markedly different from what Fed officials anticipated when they cut rates last autumn. We expect monetary policy to be adjusted accordingly."
Oracle earnings report
For investors trying to assess the current state of AI-related trade and whether demand in the cloud computing sector remains resilient, Wednesday’s$Oracle (ORCL.US)$fourth fiscal quarter earnings reports are absolutely unmissable.
Although Oracle, led by Larry Ellison, endured a prolonged slump in the first quarter of this year, the stock has still gained 12% year-to-date. Deutsche Bank analyst Brad Zelnick stated that as the AI boom continues to accelerate, demand for Oracle’s services should remain healthily expansive.
Zelnick wrote: “Demand for AI infrastructure has driven a genuine inflection point in public cloud revenue and backlog growth, enabling these long-standing industry leaders to re-accelerate their growth rates from an increasingly large base.”
However, Zelnick also cautioned that companies like Oracle face mounting pressure from 'the substantial upfront costs required to significantly expand new capacity to meet demand.' Currently, these costs are increasingly being financed not through free cash flow but through aggressive debt issuance.
Data show that in 2025, the world’s five largest hyperscale cloud providers issued approximately $121 billion in bonds in the U.S. corporate debt market—more than four times their annual average issuance of $28 billion between 2020 and 2024. According to Bank of America forecasts, this issuance figure will surge to $175 billion in 2026, with Oracle being the largest issuer within this group.
As long as the industry’s massive AI investments ultimately generate returns sufficient to match their high leverage burdens, the scale of debt issuance itself is not inherently problematic. However, the underlying risk is clear: should market demand begin to wane, these companies could find themselves trapped in a perilous situation of excessive debt without sufficient revenue to service it.
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Editor/melody