U.S. June CPI fell 0.4% MoM, the largest monthly decline since April 2020, driven by lower energy prices. Annual CPI slowed from 4.2% to 3.5%. Despite the World Cup boosting demand, core CPI excluding housing also eased, with YoY growth down to 2.6%. Housing inflation moderated, while auto insurance, apparel, healthcare, and used car prices all declined. Both headline and core CPI came in below expectations, signaling broad cooling of inflationary pressures in June. However, the sharp disinflation may prove temporary.
U.S. President Trump briefly announced a 20% fee on ships passing through the Strait of Hormuz, later rescinded, reigniting geopolitical risk concerns. In South Korea, a central bank rate hike and strong sales of leveraged equity products raised risks of deleveraging and liquidity tightening, leading to another market circuit breaker. Semiconductor stocks faced profit-taking pressure, while the Dow Jones Industrial Average showed relative resilience, highlighting that current market stress is concentrated in semiconductors and reflects ongoing sector rotation.
U.S. nonfarm payrolls increased by 57,000 in June, below market expectations of 113,000 but still above the 12-month average. The labor market showed no meaningful deterioration and remained broadly stable. The softer-than-expected employment data modestly eased concerns that the Fed could begin raising rates earlier than expected. Interest rate futures now point to October, rather than September, as the likely timing for the first rate hike. On a weekly basis, bond prices were relatively weak.
SpaceX Urgent Capital Needs, Large-Scale Financing Likely
SpaceX’s core businesses span rocket launches, satellite communications, and artificial intelligence. While rockets and satellites dominate current revenue, AI is positioned as the long‑term growth engine, making computing power critical. To achieve ambitious milestones and tackle complex engineering challenges, the company faces exceptionally high capital needs.
Resilient U.S. labor data and sticky core PCE inflation kept the Fed hawkish at the June FOMC, while massive AI infrastructure and data‑center investment bolstered productivity and economic fundamentals. This pushed real rates and Treasury yields to year‑to‑date highs. Major central banks in Europe, the UK, Japan, and Australia also maintained hawkish stances, reinforcing global rate‑hike expectations and triggering broad bond‑market sell‑offs with spillover effects.
AI data‑center expansion has driven heavy bond issuance from major tech firms like Nvidia and Amazon. Since the start of 2026, issuance by data‑center operators and related tech companies has risen 62% versus last year. Overall U.S. investment‑grade tech issuance and leverage have edged higher, nudging credit spreads above the broader IG market. Yet spreads have not widened sharply, thanks to strong investor demand absorbing supply and dealers anticipating issuance, which dampened volatility.
