Iran Truce Sealed, SpaceX Storms Wall Street and Warsh Steps to the Mic.
The Iran war is over - at least on paper - and the largest IPO in market history landed on Wall Street the same week the Federal Reserve hands the chairman's gavel to Kevin Warsh.
The Iran war is over - at least on paper - and the largest IPO in market history landed on Wall Street the same week the Federal Reserve hands the chairman’s gavel to Kevin Warsh. That’s a lot to digest before the bell, and oil at $83 is just the opening sentence.
The Rundown
The US and Iran reach a framework deal to end the war, with formal signing scheduled for Switzerland on June 19
Oil drops sharply as the reopening of the Strait of Hormuz becomes the base case for global energy flows
The biggest IPO in history lands on Wall Street and instantly repriced every listed space name in the market
Fed week opens under a brand-new chair, with the rate decision and a fresh dot plot due Wednesday
The Peace Deal That Changes the Tape
Sunday night brought the announcement traders have been waiting on for four months. Washington and Tehran confirmed a framework deal to end the war, with Pakistani Prime Minister Shehbaz Sharif - who brokered the negotiations - saying the formal signing will take place on June 19 in Switzerland. President Trump is already in France for the G7 summit in Évian, a short drive from Geneva, and Vice President JD Vance has hinted Trump may attend the ceremony himself.
The text both sides have signed off on is a memorandum of understanding, not a final peace treaty. It opens a 60-day window in which the harder questions - sanctions, frozen Iranian assets, the nuclear program - still need to be worked out. But the operational part is what moves markets: the US maritime blockade lifts immediately, the Strait of Hormuz reopens for shipping once the deal is signed Friday, and the mine-clearing operation in the strait begins this week.
That reopening is the single most important number on the screen this morning. WTI dropped roughly 5% in early trade toward $83 a barrel, with Brent following.
Asian equities and US futures both pushed higher overnight. Israel has not yet officially responded and Sunday’s Hezbollah projectile incident, followed by Israeli airstrikes on Beirut, is a reminder of how fragile this still is. Trump publicly warned all parties not to put the deal at risk. Worth watching that thread all week.
Friday’s Close, Quietly Strong
Before the weekend news, Friday already wrote a constructive session. The S&P 500added 0.5% to 7,431.46 and gained 0.7% on the week. The Dow Jones closed 0.7% higher and the Nasdaq tacked on 0.3%. WTI lost 3% on Friday alone before Sunday’s announcement extended the move.
The 10-year Treasury yield ended the week at 4.487%, and the euro slipped to 1.1573 against the dollar. The University of Michigan’s preliminary June consumer sentiment showed a small bounce, with inflation expectations easing to 4.6%, still uncomfortably high, but moving in the right direction. The CME FedWatch tool now puts the probability of a rate hike by year-end at 61%, though analysts at Macquarie don’t see Warsh moving until Q1 2027.
SpaceX: The Biggest Listing in History
Friday belonged to Elon Musk. SpaceX raised $75 billion by selling 555,555,555 shares at $135 each, valuing the company at $1.77 trillion at the IPO price. The stock opened at $150, closed at roughly $161, and finished the session up 19% from the offer price. TESLA INC (TSLA | ▲1.82%) rode the halo and added almost two percent on the day.
Here’s the part nobody wants to say out loud: at $135, this prices SpaceX at 94 times revenue, according to Fidelity. That’s a higher multiple than Nvidia, Amazon (AMZN), or Meta currently trade at. Morningstar called the valuation “egregiously overvalued” before the listing and put fair value at “only” $780 billion, less than half the IPO market cap. Their take: patient investors will get a chance to buy this name much cheaper later.
The collateral damage in the rest of the listed space complex tells you what the market thinks happened to relative valuations. VIRGIN GALACTIC HOLDINGS INC (SPCE | ▼31.76%) was crushed for 32%. ECHOSTAR CORP-A (SATS | ▼10.97%) gave back its 11% pop. AST SPACEMOBILE INC (ASTS | ▼15.53%) fell nearly 16%.
Momentus, Spire Global, Firefly Aerospace, Voyager Technologies, Intuitive Machines and Redwire all reversed in the same hour. Younger names like Planet Labs and Rocket Lab dropped around 10% on average.
This is the part I want to point at, not to take a victory lap but because it’s a clean teaching moment for anyone reading these notes ahead of the open. Thursday’s update flagged exactly this trade.
The peer-group rally on Wednesday - SPCE up 22%, MNTS up 44%, SPIR up 21%, FLY up 18%, VSAT, VOYG, LUNR, RDW and SATS all up 15-20% - was named as a hype trade with no commercial overlap with SpaceX, and readers were told explicitly to “watch the first week of SPCX trading before deciding any of these moves were the start of something.” Friday delivered the reversal mechanically.
The mechanic was rotation. Traders who had been long the proxies for months sold them Friday morning to fund their SPCX allocation. A 32% drop on Virgin Galactic isn’t a fundamental move, it’s the marginal buyer leaving the room the moment a real ticker exists. Once the anchor trades, the synthetics stop being synthetics and have to clear on their own fundamentals, which for most of these names is a difficult conversation.
My read on SPCX itself: a 19% pop on day one for a company that came public at 94x sales doesn’t tell you the IPO was priced correctly. It tells you the underwriters left some money on the table to get the deal done at the size they wanted. The interesting question is what happens when the early-investor lockups roll off in six and twelve months. That’s when the real price discovery starts.
Adobe - Good Quarter, Bad Reaction
ADOBE INC (ADBE | ▼6.76%) closed at $204.02 on Friday despite reporting better-than-expected quarterly results the night before. Two things broke the stock. The CFO is leaving, and the company is pivoting to a freemium model, offering a no-paywall AI tier to grow the top-of-funnel user base.
This is the second large enterprise software name in a week to get punished after results. ORACLE CORP (ORCL | ▲0.02%) was down 8.5% on Thursday before stabilizing Friday. The pattern is recognizable, the AI transition costs money, and the market is rapidly losing patience with software businesses that can’t show the conversion landing in the income statement. Salesforce has the same problem. Adobe just joined the club.
Paramount Gets the Green Light on Warner
Late Friday, the US Department of Justice cleared PARAMOUNT SKYDANCE CL B (PSKY | ▼0.19%)’s $81 billion takeover of WARNER BROS DISCOVERY INC (WBD | ▲0.45%). The DOJ’s antitrust unit said the merger would likely “enhance competition across the media and entertainment ecosystem, with benefits to American consumers and workers.”
European regulators still need to weigh in, but the hardest hurdle is now behind the deal.
The transaction was announced in February after a bidding war that included NETFLIX INC (NFLX | ▼1.14%). What you get is a single entity holding CBS, Paramount Pictures, HBO, Warner Bros., CNN, the DC and Star Trek catalogues, and the combined streaming platforms.
The logic is consolidation in a world where Netflix and Disney already have meaningful scale advantages. The risk is that two complicated companies merging into one doesn’t actually fix the underlying streaming economics, it just creates a bigger version of the same problem.
Chips, Housing, and the Airlines
The semiconductor complex had a split session Friday. Marvell, Broadcom, AMD, Intel, Nvidia, and Micron had all surged on Thursday - some by more than 10% - but Friday was choppy. Intel and AMD held onto meaningful gains while the rest of the group consolidated. COREWEAVE INC-CL A (CRWV | ▲5.02%) added 5% on confirmation it will join the Nasdaq 100 effective June 22, the kind of forced-buying tailwind that gives the stock a structural bid for the next two weeks.
Airlines caught a clean tailwind from the oil move.
DELTA AIR LINES INC (DAL | ▲1.50%), AMERICAN AIRLINES GROUP INC (AAL | ▲2.25%) and UNITED AIRLINES HOLDINGS INC (UAL | ▲2.58%) all closed higher as fuel costs reset lower for the second half of the year. With Hormuz reopening on Friday, that trade should have more legs into the back half of June.
LENNAR CORP-A (LEN | ▼4.90%) was the day’s casualty in housing, falling almost 5% after quarterly revenue missed Wall Street estimates.
It’s the latest signal that the US housing market is still stuck. Mortgage rates above 7%, sticky home prices, and exhausted buyer demand, the combination doesn’t unstick until either rates come down or prices give. With Warsh likely on hold Wednesday, neither is happening this month.
Fed Week Under New Management
Wednesday is the main event. The FOMC’s rate decision lands at 2 PM Eastern, and this is the first meeting chaired by Kevin Warsh. The consensus is for rates to hold steady, with a fresh dot plot and updated economic projections doing the heavy lifting.
The setup is awkward. Last week’s May jobs report was strong, the latest inflation data ticked higher, and the labor market still doesn’t look like one that needs lower rates. The peace deal optimism has pulled some hawkishness out of the futures market over the past 48 hours, but Warsh inherits an economy that, on the data, looks closer to a rate hike than a rate cut.
His communication style is the swing factor. Warsh has a reputation for being more market-aware than Powell was, he’s spent more time on Wall Street and less time in academia. The first press conference will tell us a lot about how he wants the bond market to interpret his Fed. Watch the language around financial conditions and the labor market in particular.
One more housekeeping item: Friday is Juneteenth. US markets are closed. So the week effectively wraps Thursday afternoon.
Bottom Line
The setup heading into this week is unusually clean. A four-month war ends. Oil drops 5%. The biggest IPO in history is digesting on the tape. A new Fed chair takes the podium Wednesday. Any one of those, on a normal week, would be the headline. We’re getting all four.
What I’m watching: the durability of the Iran trade once the signing actually happens Friday - peace deals tend to disappoint in the implementation phase - and how Warsh handles his first press conference.
If he stays patient and resists pressure to flag a hike, equities likely run further. If he leans into the inflation data, the second half of the week could look very different from the first. Either way, this is the kind of week that shapes what positioning looks like for the rest of Q2.
ChartMill Market Desk - Kristoff
With regard to the stocks discussed in the article above; the author owns individual shares in Nvidia and Netflix.
This daily update is prepared by ChartMill for informational purposes only and does not constitute investment advice. Always do your own due diligence before making investment decisions.
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