Equity markets experienced significant volatility over the week, selling off sharply before a rebound was triggered by comments from President Donald Trump regarding a potential deal and a halt to new military actions. The S&P 500 and Nasdaq indices fell to test their 50-day moving averages before recovering to post modest gains on Friday, hovering near crucial technical levels. The Dow Jones Industrial Average registered a solid advance, while the small-cap Russell 2000 index surged higher. Stocks related to artificial intelligence were at the forefront of both the midweek decline and the subsequent rally, with many ending the period with substantial weekly increases.
SpaceX set a record with its initial public offering, pricing shares at $135 each, with its stock indicated to open higher on Friday. Oracle shares sold off due to concerns over the substantial financing required for its capital expenditure plans, though this news was viewed positively for companies in the AI hardware sector. Apple showcased its new AI capabilities, but the market response was tepid. Headline consumer inflation reached its highest level in three years, and wholesale inflation also accelerated, though core measures for both the Consumer Price Index and Producer Price Index remained relatively subdued.
Market Swings Conclude with Gains
The S&P 500 and Nasdaq plunged to test their 50-day moving averages, driven by AI sector anxieties and renewed geopolitical tensions, but staged a powerful recovery following optimistic comments from the President about a potential Middle East agreement. As of Friday morning, the S&P 500 was higher for the week, moving back above its 21-day average. The Dow Jones posted a solid weekly gain, and the Russell 2000 small-cap index soared to a record high. Crude oil prices dropped on hopes for a diplomatic resolution, and Treasury yields also declined.
Inflation Data Tempers Rate Hike Concerns
Both consumer and producer price inflation accelerated to three-year highs in May. However, moderating oil prices suggest headline inflation may soon ease. The core Consumer Price Index, which excludes volatile food and energy costs, rose less than anticipated from the prior month. Core CPI inflation edged higher to approximately 2.9%. Meanwhile, core PPI inflation unexpectedly slowed. As markets anticipate the first Federal Reserve meeting under the new leadership, expectations for an interest rate increase by year-end remain, though the probability has decreased.
SpaceX IPO Sets Valuation Record
The space exploration company founded by Elon Musk sold over 555 million shares at $135 each in its initial public offering, matching the price indicated a week prior. The offering raised a record amount, valuing the company at $1.77 trillion. SpaceX shares jumped 19% in their Nasdaq debut on Friday, sending the company's value past $2 trillion to make it the sixth-biggest U.S. company by value and turning Elon Musk into the world's first trillionaire.
Oracle Declines on Spending and Financing Plans
The company reported a 24% rise in fiscal fourth-quarter earnings, with revenue growing 21% to $19.2 billion, fueled by strong demand in artificial intelligence. Oracle added more than $80 billion to its remaining performance obligations, a forward-looking metric for contracted work, bringing the total to $638 billion. To meet this demand, the company outlined substantial capital expenditure plans and projected significant revenue growth by fiscal 2027. To fund these ambitions, Oracle announced plans to raise $40 billion through new equity and debt financing.
Apple Introduces New AI Assistant
At its annual developer conference, Apple unveiled its upgraded artificial intelligence assistant, Siri AI. The new assistant promises enhanced capabilities, including generative and agentic AI applications across Apple's device ecosystem. A beta version is scheduled for release in the autumn alongside new hardware. Despite the announcement, which was part of a broader suite of AI reveals, Apple's stock declined as analysts suggested the company was merely catching up to competitors in the AI space.
Other Notable Market Developments
TSMC reported a 30.1% year-over-year increase in May sales, keeping the chipmaker on track to meet its second-quarter revenue target. TSMC is a leading manufacturer of advanced processors, including AI chips for companies like Nvidia.
Hinge Health raised its full-year sales and profit outlook during its inaugural investor event. The online physical therapy company now anticipates sales between $818 million and $824 million for the year, representing 40% growth, with a strong operating margin. The company also provided bullish guidance for the current quarter, sending its shares to a new high.
GSK announced an agreement to acquire cancer-focused biotechnology firm Nuvalent for $10.6 billion in cash, representing a 40% premium. Nuvalent's stock soared to a record high. The biotech is developing cancer treatments using kinase inhibition, with two of its drugs potentially receiving regulatory approval this year.
TG Therapeutics shares surged to a four-year high after the company reported encouraging trial results for its drug, Briumvi, in treating myasthenia gravis. The study showed a significant improvement in symptoms for a majority of patients. Briumvi is already approved for treating multiple sclerosis. The company's CEO also provided an optimistic sales forecast for 2027.
FuelCell Energy reported a third consecutive quarter of narrowing losses, despite a decline in revenue. The alternative energy company's sales pipeline grew dramatically, largely attributed to demand from AI data centers, though its order backlog decreased. The stock was volatile but ended the week little changed, maintaining a significant year-to-date gain.
Adobe surpassed Wall Street's expectations for its fiscal second quarter and issued strong guidance. However, shares fell after the company announced the departure of its Chief Financial Officer. This news follows a prior announcement regarding the eventual departure of the CEO. Adobe's stock sold off, touching its lowest levels in seven years.
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