By the end of last week, the Nasdaq plunged more than 4%, the S&P 500 lost 2.6%, and the Dow Jones fell 1.4%. Ironically, it was good news or, more precisely, the fact that the U.S. economy added 172,000 jobs, while payroll figures from previous months were revised upward, that triggered the sell-off, as it gives the Fed more room, if not to tighten monetary policy, at least to keep it unchanged for a longer period.
For instance, according to the CME FedWatch Tool, markets are now pricing in more than a 70% chance of another rate hike. No wonder gold is once again below $4,400.
Yet investors seem to have short memories. U.S. futures opened the new week higher despite rising tensions in the Middle East. Why?
On the geopolitical front, Trump’s Truth Social posts about progress in talks with Tehran appear to have reassured markets once again.
As for monetary policy concerns, attention seems to be shifting toward the upcoming SpaceX (SPCX) IPO, reportedly targeting up to $75 billion, making it one of the largest public offerings in history. The concern is that, despite generating more than $18.5 billion in revenue in 2025, SpaceX lost nearly $5 billion and is still targeting a valuation of roughly $1.77 trillion. The bet appears to be that SpaceX could become another meme stock like Tesla, growing regardless of fundamentals.
Now, if negotiations with Iran stall, if inflation remains stubbornly high, or if economic data continues to undermine hopes for Fed rate cuts, optimism around the SpaceX IPO could eventually turn into an “entire market trap,” as AI-linked companies already account for an outsized share of gains, leaving downside risks elevated. That risk could only increase further once OpenAI and Anthropic go public.
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