By Michael Otto Denzin
After the largest IPO in history, investors are turning their attention to the crucial questions of the coming week: Will the capital remain in the market, a possible peace in Iran will lead to falling interest rates – and what course will the US Federal Reserve take under its new boss Kevin Warsh?
After SpaceX’s IPO, a lot will depend on how the stock performs on its first days of trading, especially on Wall Street. One question is whether any short-term price gains will be used to take quick profits or, conversely, whether an attempt will be made to jump on the bandwagon. Given the gigantic capital flow of around $75 billion into Elon Musk’s space and AI company, a large “stop-loss wave” could also be triggered – especially if the price develops negatively.
Market participants emphasize that the volume of the largest IPO in history is too large for a sharply falling price to be offset by support purchases by the issuing banks. “Who twitches first?” is the big question. If all market participants remain in their positions, prices could continue to climb.
At least the environment is favorable. According to CNN evaluations, US President Trump has already announced victory over Iran and similar imminent agreements at least 38 times, but the stock market is ready to believe him again in the current case. This sets off the usual causal chain: peace with Iran, end of the blockade for tankers in Hormuz, secure oil supplies, falling oil prices, decreasing fears of inflation and thus easing worries about rising interest rates and therefore falling yields on the bond market. And as we all know, the stock markets love low interest rates. Market strategist Jochen Stanzl from Consorsbank says a quick opening of the Strait of Hormuz could drive away “the specter of interest rates”.
In keeping with this, the US Federal Reserve’s next interest rate meeting is coming up next week, for the first time under the leadership of Kevin Warsh. The new Fed chief came into office as President Trump’s nominee and, as is well known, he repeatedly and vehemently called for lower interest rates under Warsh’s predecessor. “To get the job, Warsh obviously made the argument that a productivity revolution was underway,” said Brij Khurana, fixed income portfolio manager at Wellington Management, stressing that it would be “concerning” for the bond market if Warsh did not identify inflation risks.
With the significant fall in oil prices, the stock markets are likely to forgive Warsh if, despite the recent increase in US consumer prices of over 4 percent compared to the previous year, he does not Interest rate increase should advocate. In any case, the interest rate expectations tool CME signals that no interest rate increase is expected in the coming week. A week ago, 60.4 percent of market participants expected key interest rates to remain unchanged until the September meeting. After Trump’s renewed peace announcements, the share rose to just over 70 percent – and with it the number of potential share buyers. However, the current CME data can also be read as meaning that an interest rate increase is priced in for the September date with a probability of only around 27 percent.
In addition to the US Federal Reserve, the central banks in Japan, Great Britain and Switzerland will also decide on interest rates next week. An interest rate increase in Japan is considered quite likely, while the majority of economists in Great Britain and Switzerland expect interest rates to remain unchanged.
With the big June expiry day for options and futures on the international futures exchanges on Friday, there is another stress factor for the markets. However, derivatives traders are unlikely to wait until the last minute and will therefore clean up their positions before the Fed’s decision is announced on Wednesday evening. Investors should therefore be prepared for volatility in individual stocks that often cannot be explained by information.
At the end of the expiry date, the changes that have already been decided within the various stock indices will be implemented. This time the DAX is also there again: Hochtief shares will be included in the index of the 40 most important German stocks. The paper from Porsche Holding has to make way for it, which is moving down one step to the MDAX. There are also a number of other changes in the MDAX, but also in the SDAX and the TecDAX.
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(END) Dow Jones Newswires
June 12, 2026 06:57 ET (10:57 GMT)