▲ SpaceX
On Monday (local time), US stock markets closed mixed as SpaceX's massive bond issuance and weakness in big tech stocks overshadowed positive news regarding progress in peace talks between the US and Iran.
On the day, the Dow Jones Industrial Average rose 148.01 points (0.29%) from the previous session to close at 51,712.71.
The S&P 500 Index fell 27.79 points (0.37%) to 7,472.79, while the tech-heavy Nasdaq Composite Index dropped 351.33 points (1.33%) to close at 26,166.60.
Leading the Nasdaq's decline was space company SpaceX, which had recently garnered investor attention with its initial public offering (IPO).
SpaceX's stock price plummeted 16.4% following news that it is launching its first-ever investment-grade corporate bond issuance of at least $20 billion to raise funds for building artificial intelligence (AI) infrastructure.
Although the company stated it holds approximately $10 billion in cash and cash equivalents, the market focused on the burden of massive borrowing expansion and high valuation.
Google's parent company, Alphabet, also fell 5% due to the departure of key AI researchers to competitors.
Major hyperscalers (operators of ultra-large data centers) such as Meta, Amazon, and Microsoft (MS) also recorded declines in the 2 to 4% range, as doubts grew over excessive infrastructure investment costs.
Market analysts interpret this tech stock correction as a short-term shift in investor sentiment rather than long-term damage to corporate fundamentals.
Bill Northey, senior investment director at U.S. Bank, explained that tech stocks are highly sensitive to investor sentiment, and related stocks tend to move together daily.
He added, "If you take a step back, the strongest fundamentals lie in building AI data centers," emphasizing that "this includes not only large hyperscalers but also various component-related companies."
International oil prices fell sharply.
In their first high-level meeting since signing a peace memorandum of understanding (MOU), the United States and Iran agreed on a roadmap to reach a final agreement within the next 60 days.
In line with this, the US Department of the Treasury decided to temporarily allow the sale of Iranian crude oil, leading Brent crude futures for August delivery and West Texas Intermediate (WTI) for July delivery to drop 3.31% and 2.32%, respectively, from the previous session.
Despite the easing of geopolitical risks, the market was weighed down by SpaceX's massive bond issuance, the burden of big tech's AI investment costs, and caution over the Federal Reserve's hawkish monetary policy.
The yield on the 10-year US Treasury note rose 5 basis points (1 basis point = 0.01 percentage point) to trade at 4.51%, while the Bloomberg Dollar Spot Index, which tracks the dollar against six major currencies, rose 0.2%.
Spot gold prices rose 0.9% to trade at $4,191.14 per ounce.
Investors' attention is focused on the May Personal Consumption Expenditures (PCE) Price Index, scheduled to be released on June 25.
The PCE is the Federal Reserve's preferred inflation gauge.
Following Federal Reserve Chairman Kevin Warsh's emphasis on the need for price stability at last week's Federal Open Market Committee (FOMC) meeting, a stronger-than-expected PCE reading is likely to bolster expectations of a hawkish stance by the Fed.
(Photo: AP, Yonhap News)
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