📈 US markets drop as inflation hits 3-year high | SpaceX gets big wins with ratings agencies, ETFs

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The Big Picture

• US inflation comes in at 4.2% year-on-year, the highest in three years. Trump said he loved it, but markets did not. High inflation plus last week’s strong employment data indicates the Fed may raise rates. This possibility, plus renewed US strikes in Iran, contributed to drops on the S&P 500 (down 1.6%) and Nasdaq (down 2%). (BBC)
  
  

• Energy, materials lift ASX despite cold open. The US market slide hit the ASX early, opening down 0.9%. Thankfully, it was a strong day for companies that take stuff out of the ground. BHP (up 1.4%), Woodside (up 1.7%), Santos (up 2.5%) and Karoon Energy (up 4.3%) were among the winners — the ASX ended the day flat. (AFR)
  
  

• Australians take on record debt to afford cost of living. New personal loans from banks reached a record $5.1 billion in the first quarter of 2026. These loans charged 9% interest on average in March. Calls to the national debt helpline has also increased. (Guardian)
  
  

• AUKUS draws fire as setbacks hinder submarine deal. The 30-year, $366 billion program is drawing criticism as the UK now appears unable to uphold its side of the deal. This comes after “America First” policies saw the US change the deal to give Australia a second-hand submarine instead of a new one as initially promised. (AFR)
  
  

• World Cup to be biggest betting event in history. Over $71 billion in wagers have already been placed, with each match seeing an average of $680 million in bets. Anti-gambling advocates have done their best to discourage the practice, but increased access appears to have overwhelmed their efforts. (BBC)

Companies in the news

• SpaceX wins big with ratings agencies, ETF giants. Moody’s, Fitch, and S&P have reportedly given SpaceX investment-grade credit rating, indicated by a BBB- rating or higher (or equivalent). Elsewhere, ETF providers have drummed up US$8 billion in space-related ETFs since the start of the year, providing guaranteed passive buyers of the stock. (Bloomberg | AFR)
  
  

• Oracle joins AI giants’ spending spree with $70bn forecast. Despite flat revenue forecasts, the database firm is increasing its investment spend by 25% year-on-year. This spooked investors, sending the stock down 8%. Questions circle around a massive US$300 billion contract with OpenAI, which sceptics doubt OpenAI will be able to follow through on. (FT)
  
  

• Australia’s largest gold miner under pressure on poor results. Northern Star Resources has come under fire from activist investors over its poor performance, including a 42% stock price decline since the start of March. The company admitted it has been approached for takeovers and mergers due to the poor results. (AFR)
  
  

• KIIS FM sees ratings plummet in the post- Kyle and Jackie O era. The Sydney breakfast show, owned by ASX-listed ARN Media, has had its audience share fall from 11.7% to 8.2% after the tumultuous end of its popular Kyle and Jackie O Show. (News)
  
  

• SK Hynix looks to cash in with $14bn US listing. The Korean chipmaker is reportedly targeting an August listing. Its stock is up 208% in 2026 and is looking to raise money in the AI-hungry US markets. This will add to the nearly US$400 billion of AI IPOs and share offers hitting US markets. (Reuters)
  
  

• JB Hi-Fi refunds customers after ACCC investigation. The regulator determined the electronics retailer misled customers with false promotional prices. JB Hi-Fi will repay over $250,000 to customers for the misdirection. This is the ACCC's second win against misleading promotions in as many months, with the federal court ruling in their favour against Coles in May. (Capital Brief)
  
  

• European Central Bank cracks down on Revolut. Europe’s most valuable fintech has lost its permission to release new product until it rectifies certain deficiencies. Revolut has expanded rapidly and pumped out new products, but the central bank claims the neobank has become sloppy in its pursuit of expansion. (FT)

A rising rocket lifts all staff

SpaceX’s IPO stands to make Elon Musk the world’s first trillionaire, but it will also create roughly 4,000 millionaires, including some in unexpected roles. Non-technical staff, including cooks and cafeteria workers, are among the employees with SpaceX equity who are ready to cash in on the world’s largest IPO.

Staff were often offered equity in place of higher cash salaries, and those true believers have seen their faith rewarded. It goes to show that any job can make you a millionaire if you’re in the right place at the right time. (TNW)

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The $400 billion test

With five major AI companies either going public or selling new shares for an estimated US$400 billion, we discussed what that means for markets on yesterday’s episode of Equity Mates Investing. (Spotify | Apple | YouTube)

Ren: So it's a $400 billion test essentially. And what it is asking is just how much money are investors willing to put behind this AI thematic because there's a lot of companies that are asking for money. So SpaceX, first cab off the rank asking for $75 billion, it seems like they've got it. Next cab off the rank was Google or Alphabet. They asked for $80 billion from investors. It was so in demand that they upped it to $85 billion.

Meta, they then said, "Hey, well, we want to get involved in this party as well because Google seems to have done it.” They were talking of raising tens of billions of dollars.

And then that leads us to the final two big ticket items. Anthropic has filed for an IPO. They're going to be looking to raise a lot of money maybe up to $100 billion.

And then this week OpenAI also filed for an IPO. They're going to list on the share market as well, maybe as soon as September and they're also going to be looking to raise probably similar amount to Anthropic, if not more.

Bryce: Yeah. Ridiculous amounts of money. And so what we're really saying here is it's the $400 billion test because we're going to test if there's $400 billion in cash sitting around somewhere. So if 400 billion has to be liquidated across other tech companies or other parts of the market, then you know what happens there. There's going to be selling pressure.

• Equity Mates Investing: The more, the merrier? Not necessarily. Stephen Arnold from Aoris makes the case for less stocks and more screening. (Spotify | Apple | YouTube)

• Buy or Sell: Software stocks are rallying as early AI replacement fears look less scary than expected. We’ve got five ASX software names riding the rally. (Spotify | Apple | YouTube)