Stocks rise as SpaceX makes market debut; oil slides on Gulf peace hopes
Market Overview and Key Drivers
By Sinéad Carew and Iain Withers
NEW YORK/LONDON June 12 (Reuters) - MSCI's global equities index rose on Friday with Wall Street ending modestly higher as shares of Elon Musk's SpaceX soared in their market debut, while oil prices fell more than 3% on fresh hopes for a peace deal between Iran and the U.S.
Background: Recent Market Movements
Stocks had rallied sharply on Thursday after U.S. President Donald Trump called off attacks on Iran and announced the two countries were close to a deal to end their three-month-old war.
Details of the Potential Iran Deal
However, details of such a deal were unclear. A senior U.S. official said on Friday that negotiators for the U.S. and Iran are close to the finish line of a deal that could be signed in the coming days. The official told reporters that an agreement would include a commitment by Iran to neither develop nor procure nuclear weapons and would reopen the Strait of Hormuz to normal oil traffic and lift the U.S. blockade.
But Iran's foreign minister Abbas Araqchi said that nuclear issues will be discussed in later stages and that management of the Strait of Hormuz would not return to the pre-war era.
Market Reaction to Developments
Still, U.S. Treasury yields rose while stocks finished higher after climbing back up from morning declines.
SpaceX IPO and Broader IPO Outlook
Impact of SpaceX Market Debut
The SpaceX IPO was a bigger boost for stocks on Friday than the prospect of an Iran deal, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma, adding that since mid-March President Donald Trump has repeatedly said that a deal with Iran was close.
"The market's been stung more times about peace in the past. Yesterday was because Trump called off the attacks. That was a tangible result. Today we're still waiting for proof of a deal," he said.
"The excitement about the SpaceX IPO is what's driving the market. A healthy IPO is great for the market."
Upcoming IPOs in the Technology Sector
Dollarhide said it could be a productive year for IPOs with artificial intelligence companies OpenAI and Anthropic also expected to make their debuts this year.
SpaceX Performance and Market Significance
In their first day of trading, shares in rocket and spacecraft manufacturer SpaceX closed up more than 19% at $161.11, with the market debut pushing the company's valuation past $2 trillion and making founder Elon Musk the world's first trillionaire.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the successful SpaceX IPO was "a barometer for overall risk appetite and the health of the market in general."
Major Indices and Global Markets
On Wall Street, the Dow Jones Industrial Average rose 353.51 points, or 0.70%, to 51,202.26, the S&P 500 rose 37.16 points, or 0.50%, to 7,431.46 and the Nasdaq Composite rose 79.18 points, or 0.31%, to 25,888.84.
MSCI's gauge of stocks across the globe rose 12.69 points, or 1.15%, to 1,112.24.
Earlier, the pan-European STOXX 600 index finished up 1.88%. The European Central Bank raised interest rates for the first time in nearly three years on Thursday to nip war-driven inflation in the bud. Final inflation data from several European countries including France and Spain showed inflation accelerated in May, while official data showed Britain's economy contracted by 0.1% in April — its first monthly drop since August.
Oil and Energy Markets
Oil Price Movements
OIL MARKETS SLIDE
In energy markets, oil futures added to Thursday's losses. U.S. crude settled down 3.23%, or $2.83, at $84.88 a barrel after touching its lowest level in almost two months. Brent finished the session at $87.33 per barrel, down 3.37%, or $3.05.
Fixed-Income and Currency Markets
In fixed-income markets, U.S. Treasury yields rose from one-week lows as traders kept an eye on Middle East updates and looked ahead to next week's Federal Reserve policy meeting, which will be the first under the leadership of Kevin Warsh.
The yield on benchmark U.S. 10-year notes rose 1.6 basis points to 4.481%, from 4.465% late on Thursday, while the 30-year bond yield rose 1.8 basis points to 4.9705%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.7 basis points to 4.087%.
Currency and Precious Metals Update
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05% to 99.78, with the euro down 0.08% at $1.1568.
Against the Japanese yen, the dollar strengthened 0.18% to 160.2. Traders are still on high alert for intervention from Japanese authorities as the yen stays close to the 160 level that many see as a line in the sand.
In precious metals, spot gold fell 0.03% to $4,212.66 an ounce while spot silver rose 0.86% to $67.93 an ounce.
(Reporting by Sinéad Carew, Iain Withers, Stella Qiu; Editing by Shri Navaratnam, Kevin Buckland, Andrew Heavens and Nia Williams)
