Investors searched for firmer ground as strong jobs data and simmering geopolitical tensions unsettled equities, before a late-week rally helped restore some stability.
Read this article to understand:
- Why markets were unsettled early in the week
- How geopolitics and oil prices brought some stability
- The focus on the SpaceX IPO on Friday 12 June
Investors came into this week on the back foot, looking to steady themselves after a sharp downturn in markets at the end of last week. Friday’s sell-off was severe, led by technology, with the NASDAQ suffering its worst one-day fall since 2020. Strong US jobs data, with payrolls rising by 172,000 and well above expectations, forced investors to rethink the idea that interest rates might soon fall. Instead, the message was that the Federal Reserve may need to tighten policy further and raise interest rates. Bond yields moved higher, oil prices rose on Middle East tensions, and equities were hit from both directions at once.
By Monday, investors were looking for stability rather than strength. Oil prices started to ease back, helping calm some inflation fears. Equities edged higher, with the S&P 500 rising modestly, but the tone remained cautious. Investors were not yet ready to commit to a recovery, with geopolitical risks simmering in the background and the path for interest rates still uncertain. It felt more like a pause after a shock than a genuine turning point.
It felt more like a pause after a shock than a genuine turning point
Tuesday added another layer of complexity. Oil prices fell more decisively, dipping below 90 dollars at one stage and bond yields also moved lower as inflation expectations eased. But equity markets, which would typically react positively to lower oil prices, struggled to respond. Technology stocks stayed under pressure: while the broader market held steadier, there was clear rotation away from last year’s winners. That shift suggests investors were beginning to question not just the economic outlook, but the strength of the earnings story behind the technology rally.
By mid-week, risk appetite was in retreat again as geopolitics returned to the fore. Further US strikes against Iran pushed oil prices higher and revived concerns about disruption to global energy supply. The S&P 500 fell by over 1.5 per cent, with losses focused on growth and cyclical sectors, while defensive sectors such as consumer staples held up better. Inflation data released on Wednesday was slightly more reassuring, but it was largely ignored as energy prices and geopolitical headlines took centre stage.
Then came Thursday, and with it a decisive shift in tone. In a sharp reversal, hopes of a deal between the US and Iran gathered pace. President Trump said the US had “just made a great settlement”, and there were reports that planned attacks had been cancelled and an agreement to end the conflict was close. Oil prices reacted immediately, falling towards $88 per barrel and heading for a three-month low.
The impact across markets was significant. The S&P 500 rose by 1.75 per cent, its strongest gain in two months, while bond yields fell sharply as expectations for further rate hikes were pushed out. Technology stocks rebounded strongly, with semiconductor shares rising by close to eight per cent, underlining how quickly sentiment can change when pressure from energy prices lifts.
Alongside this, the European Central Bank raised rates by 0.25 per cent to 2.25 per cent on Thursday. This was its first rate increase since September 2023, reminding investors that inflation concerns have not disappeared, even as daily sentiment shifts.
SpaceX shares are priced at $135, valuing the company at around $1.75 trillion
Attention is now turning to the SpaceX IPO taking place today (Friday 12 June). Shares are priced at $135, valuing the company at around $1.75 trillion. That places SpaceX among the most valuable companies globally from day one despite it still being loss-making. The company is raising roughly $75 billion by selling just three to four per cent of its shares, and demand has been strong, with the deal heavily oversubscribed. As markets settle after a volatile week, this listing will test investor appetite for high growth stories against an uncertain backdrop.1,2
Past performance is not a reliable indicator of future results.
References
- The company mentioned is for illustrative purposes only and does not constitute an investment recommendation.
- Source of all the data for this article: Aviva Investors and Bloomberg. Data as of 12 June 2026.
