US Stock Market Outlook: CPI Meets Expectations Amid Escalating US-Iran Tensions; Oracle Earnings Awaited.

US Economic Indicators and Market Reactions

The US Consumer Price Index (CPI) for May showed a seasonally adjusted monthly increase of 0.5%, aligning with market expectations, down from 0.6% previously. As of the report, US stock index futures indicated a narrowing decline, with the Dow Jones Industrial Average futures down 0.56%, S&P 500 futures down 0.48%, and Nasdaq 100 futures down 0.57%.

Pre-Market Movements

Star tech stocks experienced a general decline in pre-market trading, with Micron and AMD both dropping over 3%. Chinese concept stocks also faced losses, with UMC down over 8% and ASE Technology down over 4%.

Sanofi Faces Setbacks

Sanofi announced a significant setback in its research and development efforts, halting a Phase III trial for a rare disease drug after it failed to demonstrate efficacy. This decision puts additional pressure on newly appointed CEO Belén Garijo. The company will cease research on riliprubart for chronic inflammatory demyelinating polyneuropathy (CIDP), a rare autoimmune disease.

TSMC Reports Strong Revenue Growth

Taiwan Semiconductor Manufacturing Company (TSMC) reported a 30% year-on-year revenue increase in May, reaching NT$416.98 billion (approximately $13.2 billion). This growth reflects strong demand driven by the global race to build AI infrastructure. Analysts expect TSMC's Q2 revenue to grow by 35%.

SpaceX IPO and Market Implications

SpaceX's upcoming IPO has generated over $250 billion in subscription demand, significantly exceeding its target of $75 billion. This reflects a subscription oversubscription ratio of 3.5 to 4 times, indicating strong market interest in the "space and AI" giant.

Inflation Trends in the US

The unadjusted CPI year-on-year rate for May reached 4.2%, matching market expectations and marking the highest level since April 2023. The core CPI for May showed a monthly increase of 0.2%, slightly below expectations.

Wealth Distribution from SpaceX IPO

The SpaceX IPO is expected to create around 4,000 millionaires within the company, including cafeteria staff holding stock options. The company plans to list at a target price of $135 per share, potentially achieving a valuation of $1.8 trillion.

Market Reactions to Semiconductor News

Morgan Stanley responded to a report from SemiAnalysis regarding delays in Nvidia's 800V DC shipments, which has led to a significant drop in the US optical communication sector. Morgan Stanley maintains a bullish outlook on core CPO-related stocks, predicting explosive growth starting in 2028.