Michael Hewson's Preview:  Markets Week Ahead: SpaceX IPO, US CPI & ECB Rate Decision – 8th June 2026

Cracks Appearing? SpaceX IPO, Rising Inflation and Big Tech Profit-Taking in Focus

Having posted another set of record highs in the Nasdaq and the S&P500 in this past week, and seeing Alphabet increase the amount of its bond issuance to $85bn in the pursuit of AI expansion, are we starting to see cracks in this AI fuelled stock rally? 


Keynotes:

• Nasdaq and S&P 500 hit fresh record highs but Broadcom and CrowdStrike shares fall sharply after results
• SpaceX set to IPO on 12th June targeting a $1.75trn valuation and raising up to $75bn
• US CPI for May expected to top 4% for the first time, putting the Fed in a very difficult position
• ECB looks set to hike rates despite slowing growth across the eurozone — repeating past mistakes
• UK economy showed surprise resilience in Q1 but faces a sharp slowdown heading into summer
• Apple WWDC kicks off as Tim Cook sets the stage for incoming CEO John Ternus and an AI-enhanced Siri
• CrowdStrike announces a 4-for-1 stock split in July despite a cautious post-earnings market reaction
  
  
  

If we are, the timing of the upcoming IPO of SpaceX, could well prove to be timely given that we’ve also seen the likes of Anthropic, as well as OpenAI, start to seed the ground for their own listings. 

The market reaction to Broadcom and CrowdStrike’s numbers saw the shares fall sharply after Broadcom reported weaker than expected Q2 revenue of $22.19bn, and the company failed to upgrade its full year guidance of $100bn in AI chip sales.

While the revenue miss was minor given that it was still 48% up on last year the nature of the miss suggests that some investors may have been tempted to take some profit having seen the shares gain almost 900% since 2022, and up over 40% year to date. Net income was up by 88% to $9.31bn, while guidance for Q3 revenue was solid at $29.4bn. With customers as diverse as Alphabet, Meta, OpenAI and Anthropic driving the companies AI growth there was some disappointment that the guidance for semiconductor sales was kept unchanged at $100bn.

We also saw similar weakness in CrowdStrike shares after the bell, despite the company beating Q1 estimates on revenues of $1.39bn, an increase of 26% year on year. Net income came in at $27.8m, comparing well to last year’s Q1 loss of $104.3m. With the shares having more than doubled since April this latest reaction could simply be a case of some overdue profit taking, rather than being reflected of a wider change of sentiment. For Q2 CrowdStrike said it expects to see Q2 revenue of $1.44bn while lifting its ARR growth target to between $6.53bn and $6.56bn. CEO George Kurtz also announced the company would be undertaking a 4-1 stock split in July, describing itself as the “picks and shovels of the world’s largest technology gold rush of all time”. While an apt description it’s also important that we not forget what happened in the aftermath of the original gold rush of the American West, when many smaller companies collapsed, consolidated or needed to be recapitalised.

Against this backdrop we’ve seen evidence that despite increasing price pressures the US economy seems to be holding up well, with vacancies rising sharply in April to 7.6m, the highest level since November 2024, along with solid ADP and non-farm payrolls numbers for May.

These increasing prices pressures are likely to pose a problem for the US Federal Reserve when they meet later this month, and new Fed chair and Trump nominee Kevin Warsh is likely to face his first challenged when it comes to the interest rate policy.

On no measure is the US economy in a position that a rate cut is warranted, if anything the pressure will be on the FOMC to not raise rates at a time which could see CPI hit 4% by the summer, given that we saw US CPI hit 3.8% in April, as we look towards the May CPI numbers on the 10th June which are expected to punch above 4% to 4.2%.        

US CPI (May)

The move 3.8% in Apri for US CPI wasn’t the real story. It was the fact that PPI inflation, which tends to act as a leading indicator for CPI, soared to 6%, while rising to 5.2% on the core measure, which was well above expectations. The prospect of lower rates now looks to be becoming ever more remote with many Fed officials expressing alarm over the outlook for inflation, particularly given what we’ve been seeing in the prices paid components of the ISM data in both manufacturing as well as non-manufacturing, which shows price pressures are surging at their fastest rate in 4 years. On the plus side the economy has been growing strongly in both sectors which does augur well for the employment outlook in the short term; however, it remains to be seen how long this can last. With higher prices for gasoline, as well as freight and other raw materials the Fed will find it impossible to even consider cutting rates at this point in time and could be forced to hike by the end of the year if second and third round effects start to become embedded in baseline expectations.    
   

ECB rate meeting

11/06: Does history repeat itself? In the case of the ECB, it would seem so. Having hiked into an economic slowdown in 2008 and again in 2011, it very much looks like they will do the same thing again this week, after EU inflation rose to 3.3% in the latest flash CPI numbers for May last week. it almost seems inevitable that the ECB will once again hike into an economic slowdown. The latest manufacturing and services PMI numbers for May, posted last week saw both sectors showing increasing evidence of waning momentum, as new orders slowed and price pressures stayed elevated. In the recent manufacturing numbers, there was clear evidence that rising prices were prompting demand stall out. If energy prices continue to act as a drag on growth as well as demand it’s hard to see what good a rate hike will do apart from increase the burden on both consumers and businesses, apart from exacerbating a slowdown. To be clear a 25bps rate hike will do little to offset the effect of higher energy prices, and while the ECB will argue it has to set policy according to its mandate, the reality is given the current headwinds its facing it will have very little effect in slowing down what to all intents and purposes is a supply shock, which in turn will slow the economy anyway as demand gets choked off. 

UK GDP (Apr)

12/06 – the UK economy proved to be remarkably resilient during Q1, with the improvement, entirely driven by the service sector which grew by 0.8%, while there was also some growth in manufacturing, as well as construction. While this growth is welcome the rapid surge in energy prices, as well as increased taxes which started in April look set to snuff all of this out, despite an April inflation number that showed price growth slowed from 3.3% to 2.8%. As we head into Q2 there is a sense that this could be as good as it gets for the UK for a while, bedevilled as it is by political chaos as well as economic illiteracy on the part of its political class. Notwithstanding all of that there have been flickers of resilience with the manufacturing sector showing resilience in recent PMI numbers which rose to a 4-year high in May. However, that came against a backdrop of clients front loading purchases to mitigate price increases and supply chain disruption that are expected later in the year. This appears to be showing up in surging input costs which also rose at their fastest rate in four years, while the much bigger services sector saw economic activity in May collapse to its lowest level since January 2021. Here we saw sustained rises in input cost inflation, as well as a continued decline in payrolls, for the 20th month in succession. In response to higher input costs businesses were having to raise prices with business optimism the lowest in over a year. Against that backdrop we could see April GDP prove to be the last hurrah for a UK economy that starts to slow sharply as we head into the summer.

SpaceX IPO

11/06 – In what looks set to be one of the most hotly anticipated IPOs in years, SpaceX is set to blast off on 12th June as it looks to raise up to $75bn from investors at $135 a share, which would value the company at an eye-popping $1.75trn. This eye watering valuation looks set to see the business included in the Nasdaq with many questioning how anyone can justify such a stratospheric valuation at this level of fixed price, even before the book building process has started. In doing this SpaceX runs the risk that some investors might baulk at the price tag, raising the risk it could come up short. On any normal metric the numbers defy belief given that last year SpaceX lost $4.9bn on the back of total revenues of $18.7bn. With Starlink providing the bulk of the annual revenue, the rest is made up from its Space division which contributed just over $4bn, helped by the reusability of its Falcon 9 rockets, while its AI division, which is tied to xAI and X, delivered about $3.2bn.

        
While, according to its S-1 filing, SpaceX sees an addressable market of over $28trn, the valuation of almost all of this market comes in outside of its current competencies or businesses, and is based on the success of technologies that haven’t been perfected yet. This SpaceX premium will therefore be dependent on the business delivering on $25.45bn in contractual commitments for 2026 and 2027, as well as its ability to put data centres in orbit by 2028, using the power of solar energy to keep them running. Thus, as we look ahead to the upcoming SpaceX IPO, any investor will be basically betting on the success or otherwise, of not only its Starship launch program, but also Elon Musk’s ability to deliver on the orbital data centre part of the business, as a stepping stone to the Moon and Mars. All that aside, betting against Elon Musk in the past hasn’t exactly proved to be a successful endeavour, and this could well go the same way.

     

Apple WWDC

08/06 - this is always a keynote event for Apple watchers and even more so at a time all eyes will be on the road ahead as outgoing CEO Tim Cook sets the scene for the tenure of incoming CEO John Ternus, who takes over in September. As is always the case with the Worldwide Developers Conference investors and Apple aficionados will be eagerly anticipating the types of improvements that Apple will be looking to make to its range of products, along with developments when it comes to the next incarnation of its operating system in 2027, iOS27. Of particular interest will be how Apple intends to develop its AI solution within the Siri wrapper, having recently signed a deal with Alphabet to incorporate Gemini into its architecture. For years Apple has lagged its peers when it comes to AI, and in signing its recent deal investors will be keen to know how they intend to use it to improve Siri across its entire suite of products. It’s also quite likely that we could see the announcement of a September release date for the new foldable iPhone Ultra, along with the launch of the latest iPhone 18 handsets, as Apple looks to take the fight to Samsung in this area of the handset market.

Summary

Another week of record highs for US indices has been tempered by a sharp post-earnings sell-off in Broadcom and CrowdStrike, raising questions about whether some froth is starting to come out of the AI trade. The bigger story this week is the highly anticipated SpaceX IPO, which seeks to value the company at a staggering $1.75trn despite significant losses last year. Meanwhile, inflation is becoming the dominant macro concern — US CPI is expected to break above 4% in May, leaving the Fed with little room to manoeuvre, while the ECB looks poised to hike rates into a weakening European economy. In the UK, a strong Q1 GDP reading may prove to be the high point before rising costs and political uncertainty take their toll. Apple's WWDC also kicks off, with all eyes on the company's AI strategy and the transition to a new CEO.

FAQs

Why is the SpaceX IPO attracting so much attention?

The SpaceX IPO is expected to be one of the largest and most anticipated public offerings in recent years. Investors are closely watching the company due to its leadership in commercial space launches, the growth of Starlink, and Elon Musk's long-term plans involving orbital infrastructure, lunar missions, and Mars exploration.

Why is the US CPI report important for financial markets?

The US Consumer Price Index (CPI) is a key measure of inflation and can significantly influence Federal Reserve policy decisions. Higher-than-expected inflation may reduce the likelihood of interest rate cuts and could lead to tighter monetary policy, affecting stocks, bonds, currencies, and commodities.

How could the ECB interest rate decision impact European markets?

The European Central Bank's rate decision can affect borrowing costs, economic growth, and the value of the euro. A rate hike during a period of slowing economic activity could increase pressure on consumers and businesses, while also influencing European stock markets and currency movements.