A Record-Breaking Market Debut
The trading week closed with a landmark event: a rocket and space company began trading on the NASDAQ, marking the largest initial public offering in history. The company raised a record $75 billion — more than twice the roughly $29.4 billion raised by Saudi Aramco, which had held the title of largest IPO before this one.
The pricing history is notable. Back in 2019, the company and its bankers had set an IPO price of $135 per share, which would have given the company a valuation of $1.77 trillion before shares even started trading. When trading actually opened, shares debuted at $150 and quickly climbed as high as $176, pushing the company's valuation past $2 trillion. It maintained that $2 trillion valuation throughout the trading day, ultimately closing its first session at $160.95 — more than 19% above the IPO price.
A significant consequence of this debut was that it made the company's founder the world's first trillionaire, based on his combined ownership stakes in this space company and in his electric vehicle company.
Oil Prices and the Iran Negotiations
Oil was another major focus of the session, with prices falling sharply. The decline came as the United States and Iran reportedly moved closer to a formal agreement that could reopen the Strait of Hormuz and substantially reduce fears of a prolonged disruption to global energy supplies. US crude slid toward the mid-$80s, while Brent crude fell roughly 4% and dropped below $87 a barrel.
The diplomatic picture was layered. Officials from the administration said there was now an 80% chance that the two sides would sign a deal in the coming days. Officials from Pakistan, who were involved in the talks, said that a final agreed-upon text had already been reached, and Iran's foreign minister stated that a memorandum of understanding had "never been closer." However, the precise terms of the deal appeared to be in question, with reports suggesting that an inaccurate version of the deal had been released to the press.
Despite the uncertainty, markets showed optimism about the potential agreement and began pricing in the prospect of peace. The cautionary note was that any setback in the negotiations could quickly reignite volatility across the energy complex — a pattern that has repeated many times in the past.
Nvidia's Renewed Push Into China
A major corporate development involved a leading chipmaker reportedly informing its Chinese customers that its new Vera CPUs could be available as early as August, and that those customers could begin placing orders. According to the reporting, some Chinese clients have shown interest in the chip, though their exact identities are unclear. One large Chinese cloud company was said to be planning to order more than 300 servers, each containing two Vera CPUs. Chinese customers are also expected to deploy the chips in their overseas data centers for testing purposes.
The Vera chip is reportedly priced well north of $20,000 before bulk discounts. This product allows the company to compete directly with Intel and AMD, which have traditionally dominated the CPU market. The development underscores just how important the Chinese market is to the chipmaker, which has seen its sales there essentially evaporate. The key open question is the timing of the first shipment — a particularly relevant concern given that the company's H200 chip has already encountered a snag.
Meta Unwinds an Acquisition Amid China Pressure
In another development tied to China, a major social media and technology company has reportedly split from a startup called Manus, unwinding its acquisition following opposition from China. According to the reporting, the acquiring company has barred Manus and its staff from accessing data since the start of the month, and the company's own workers can no longer use Manus tools.
Manus is a Singapore-based AI startup with Chinese origins. Beijing had asked for the deal to be reversed back in April. The episode highlights ongoing China-related headline risk attached to the large-cap "Magnificent 7" technology names.
Media Consolidation: A Regulatory Hurdle Cleared
There was also significant movement in the media sector. A report indicated that the Justice Department had approved a $111 billion bid for a major studio and streaming entity to acquire Warner Brothers Discovery. This cleared a major regulatory hurdle that had appeared to be in doubt earlier in the week. Regulators reportedly deemed the deal not to be a threat to the current media environment. Final confirmation of the approval was still awaited.
The Central Bank Week Ahead
Looking forward, the upcoming week is shaping up as a major one for central bank action across the globe.
United States Federal Reserve: The week includes the first FOMC meeting under the new chairman, Kevin Warsh. Markets expect the Fed to hold rates steady. Recent data has reinforced a "higher for longer" stance, with investors pushing out expectations for any meaningful rate cut. Key attention will be on whether the Fed's dot plot or forward guidance shifts at all, and especially on the new chair's tone — specifically whether he signals patience on inflation or instead opens the door to either rate hikes or rate cuts later in the year.
Bank of England: The BOE is expected to stand pat at 3.75%. Of particular interest will be what Governor Andrew Bailey says, especially in the context of the European Central Bank's 25 basis point hike enacted during the prior week.
Bank of Japan: The BOJ is expected to hike to 1%, which would represent its highest rate in over 30 years — a notable shift coming after decades of loose monetary policy.
Reserve Bank of Australia: The RBA is expected to pause after three hikes, but is anticipated to resume hiking after that pause.
Additional Items to Watch
The coming week is a shortened trading week in the United States. Beyond the central banks, attention will be on a set of Chinese economic indicators. Markets will also continue to monitor the Iran headlines closely, particularly given signals from the President that something could happen over the weekend.