Morning Brief: Trump Says Peace Deal May Be Signed This Weekend; U.S. Equities Stage Strong Rally; SpaceX Hits IPO Record with $1.77 Trillion Valuation Key Snapshot

Key Snapshot

🕊️ Trump states a peace agreement with Iran could be signed as early as this weekend to resume shipping across the Strait of Hormuz. Iran notes no final decision has been reached yet.

📈 U.S. stocks rallied sharply: Nasdaq rose 2.54%, S&P 500 gained 1.75% and the Dow added 1.86%.

🛢️ WTI crude closed 2.58% lower at $87.71 per barrel, while gold surged 3.44% to $4,212.

🚀 SpaceX priced its IPO at $135 per share, securing a $1.77 trillion valuation and raising $750 billion, marking the largest IPO in U.S. history.

I. Market Outlook

Core Events

Trump called off a planned military strike on Iran scheduled for Thursday, citing progress in bilateral negotiations. He added Washington and Tehran could reach a peace deal as soon as this weekend to reopen the Strait of Hormuz to vessels. Iran responded that it has not made a final decision and will never compromise on its core red lines.

U.S. May Producer Price Index (PPI) climbed 6.5% year-on-year, hitting a three-and-a-half year high.

Market Reaction

U.S. equities notched a strong rally: Nasdaq +2.54%, S&P 500 +1.75%. WTI crude fell 2.58% to $87.71/bbl. Gold jumped 3.44% to $4,212 per ounce, and silver advanced 6.03%.

Exclusive Insight

There remains a divergence between Trump’s upbeat remarks on a weekend deal and Iran’s cautious stance. Investors have chosen to price in the optimistic scenario. The mixed moves across assets — lower oil prices alongside rallies in stocks and gold — may seem contradictory, but they stem from three positive catalysts: easing geopolitical tensions, moderating inflation pressures and the ECB’s rate hike.

II. Overnight Market Action

Summary

Peace overtures from Trump fueled a powerful rally across U.S. stocks, while oil tumbled and gold posted solid gains.

— U.S. Equities: Dow Jones Industrial Average +1.86% to 50,848.75; S&P 500 +1.75% to 7,394.30; Nasdaq Composite +2.54% to 25,809.66.

💡 All three major benchmarks rebounded firmly, led by the Nasdaq’s 2.5% gain. Market sentiment improved on two positive drivers: easing Middle East tensions and the ECB’s rate decision. Technology stocks outperformed and recouped most of the prior session’s losses.

— European Equities: STOXX Europe 600 +0.5% to 621.53. France’s CAC 40 and the UK’s FTSE 100 both rose 0.48%.

💡 European shares edged higher. The ECB’s rate hike came in line with market expectations, and the July pause signal was well-received. However, downward revisions to global growth forecasts by the IMF capped further upside.

— Fixed Income: 2-year U.S. Treasury yield fell 5.5 basis points to 4.072%; 10-year yield dropped 7.3 basis points to 4.467%.

💡 Investors viewed geopolitical developments and the latest PPI data as evidence of a temporary energy-driven inflation shock, pushing Treasury yields lower across the curve. Traders repriced the Federal Reserve’s future rate path.

— Commodities: WTI July crude -2.58% to $87.71/bbl; Brent August crude -2.92% to $90.38/bbl. Spot gold +3.44% to $4,212.34/oz; spot silver +6.03% to $67.1837/oz.

💡 Oil prices slumped after Trump’s comments on an imminent peace deal. Gold rallied 3.44% supported by a weaker U.S. dollar, the ECB’s rate hike and falling oil prices that eased inflation concerns.

— FX Market: U.S. Dollar Index (DXY) -0.41% to 99.64; EUR/USD +0.36% to 1.1577; USD/JPY -0.38% to 159.92.

💡 The dollar slid to a near one-week low. Easing tensions and the ECB’s policy move lifted the euro. The yen rebounded from 160.5 to 159.92, easing market worries over currency intervention.

— Crypto Assets: Bitcoin rose more than 3.5% to $63,557.99; Ethereum gained over 3.8% to $1,678.78.

💡 Bitcoin rebounded to $63,500 as risk appetite recovered. Crypto assets moved in tandem with U.S. stocks, with the historical correlation restored.

III. Macro Headlines

🏛️ ECB raises interest rates for first time in nearly three years to combat war-induced inflation

The central bank upgraded its inflation forecasts for 2026 and 2027, while cutting growth outlooks. Policymakers indicated a high probability of a rate pause at the July meeting.

Insight: The rate hike plus a pause signal is a compromise amid stagflation risks. Standing pat would allow inflation to spiral out of control, while prolonged tightening would tip the economy into recession. The July pause signal confirms Europe’s economy is more vulnerable than that of the United States.

📊 U.S. May PPI rose 6.5% year-on-year, a three-and-a-half year high, and climbed 1.1% month-on-month, beating consensus estimates

The data reinforced economists’ views that the Fed will keep interest rates unchanged through 2027. The central bank is likely to remove its easing bias at next week’s policy meeting.

Insight: The combination of 4.2% CPI and 6.5% PPI shows inflation pressures have spread from consumer sectors to production links. The June policy meeting will formally scrap the easing bias, laying the groundwork for a potential tightening cycle.

📉 World Bank cuts 2026 global growth forecast to 2.5%, warns growth could drop to 1.3% if geopolitical shocks escalate

The bank kept its 2026 U.S. growth forecast at 2.2%, and lowered China’s 2026 GDP growth forecast by 0.2 percentage points to 4.2%.

Insight: The World Bank is preparing for a potential stagflation scenario. The 1.3% growth outlook represents a worst-case scenario featuring overlapping energy and financial crises. The baseline 2.5% growth rate is the weakest since the pandemic.

📉 IMF cuts Euro Area 2026 growth forecast to 0.9% from 1.1%, and raises inflation forecast to 2.8% from 2.6%

Insight: The Euro Area has become the global epicenter of stagflation risks. The combination of sluggish growth at 0.9% and elevated inflation at 2.8% is a classic stagflation setup. The ECB will face tougher decisions over a July rate pause.

IV. Corporate News

🚀 SpaceX prices IPO at $135 per share, valuing the firm at $1.77 trillion and raising $750 billion, the largest IPO on record in the U.S.

Trading kicks off on the Nasdaq this Friday, and SpaceX will rank as the seventh-largest listed company in the U.S. by market capitalization.

— With a $1.77 trillion valuation, SpaceX trails only Apple, Nvidia, Microsoft, Amazon, Google and Saudi Aramco. It is the ultimate market vote of confidence in the Musk-led growth story. The stock’s debut performance will set the valuation benchmark for the broader space economy sector.

🤖 OpenAI mulls steep cuts to its token service fees

— Ahead of its own IPO, OpenAI plans to slash prices to expand market share and fend off rivals including Anthropic. While the aggressive pricing strategy helps attract users, it will likely weigh on short-term profit margins.

💾 SK Hynix raises equipment procurement prices, an unusual move for the chipmaker. Multiple suppliers are pushing for a 3% to 4% price hike.

— SK Hynix’s acceptance of higher costs reflects full production capacity and robust demand that outpaces supply. It is the latest sign of tight supply across the AI memory chip sector, and suppliers now hold stronger pricing power.

V. Key Focus Today

🚀 SpaceX IPO debut: The trading performance of the $1.77 trillion company will steer valuations across the space economy and Musk-related stocks.

📊 U.S. June University of Michigan Consumer Sentiment & Inflation Expectations: After hotter-than-expected CPI and PPI readings, whether consumers’ inflation expectations become unanchored is a key monitor point.

🇩🇪 Germany May CPI: Inflation data from the Euro Area’s largest economy will influence the ECB’s policy decision in July.