Author: Trend Research
Thursday (US Eastern Time, June 11) witnessed a textbook V-shaped reversal on Wall Street. Funds that were fleeing headlong from inflation and war the day before collectively reversed course within 24 hours.
The Dow Jones surged 929.97 points (+1.86%) to close at 50,848.75, recapturing the 50,000 mark; the Nasdaq rose 2.54% to 25,809.66; the S&P 500 gained 1.75% to 7,394.30. The Russell 2000 index led all major indices with a 3.02% gain. The VIX fear index fell nearly 12%, dropping back below 20.
The interesting part is that this big green candle emerged despite the hottest inflation data of the year.
Hottest PPI, Coldest Reaction
The May PPI released in the morning soared 6.5% year-over-year, the highest since November 2022; it rose 1.1% month-over-month, far exceeding the expected 0.7%. Breaking it down is even more startling: goods prices rose 2.8% month-over-month, the largest single-month increase since records for this data series began in 2009, with about 80% coming from energy—wholesale gasoline prices surged a staggering 23.4% in a single month. The first-stage intermediate demand prices, closer to the upstream pipeline, rose 3.2% month-over-month, also setting a historical record.
On any ordinary trading day, this data would be enough to knock the Nasdaq down 2%. But the market cared about only one thing: whether the war is about to end.
In the afternoon, Trump announced the cancellation of a scheduled strike against Iran that night, stating that Iran's top leadership had approved a draft multilateral consensus agreement, and allies including Israel had "agreed in principle." Upon the news, WTI crude oil plummeted over 4% intraday to around $86, and Brent fell below $89. Oil is the engine of this round of inflation; an oil price plunge directly dismantles the ammunition for PPI. Trump's own response to inflation was even more blunt: "I like, I like this inflation," and stated that once the war ends, oil prices will "fall like a rock."
The logical chain for funds was thus closed: draft agreement, oil price plunge, peak inflation expectations, buy everything. Sectors that fell the hardest the previous day—tech, industrials, materials—led the gains, while defensive sectors (consumer staples, real estate, energy), which hit record highs on Wednesday, were conversely sold off. In two trading sessions, the same batch of funds completed a full rotation from short to long.
Chip Stocks' Vengeful Rebound, Software Stocks' No Man's Land
The rebound firepower concentrated on AI hardware. Micron surged nearly 12%, erasing all of this week's losses in a single day; Sandisk rose 14%; Intel, upgraded by Bank of America, gained about 10% on the rationale of a surge in CPU orders; AMD rose 8%. The Philadelphia Semiconductor Index, counting from the crash on June 5th, completed its sentiment repair in just four trading sessions.
Software is a different world. Oracle plunged 9.56%, closing around $184. Beating earnings expectations was meaningless; the market focused on cloud revenue missing expectations, negative free cash flow of $23.7 billion, and a new $40 billion financing plan. After hours, Adobe delivered a standard "beat and raise" combo: Q2 revenue of $6.62 billion up 13%, full-year EPS guidance raised to $24.35 to $24.45, AI-related recurring revenue tripling year-over-year. The stock's response was a further drop of over 5% after hours. The trigger was CFO Dan Durn announcing his departure next Monday to join Marvell, following CEO Narayen's announcement of succession in March, making him the second core executive to leave Adobe in three months. The stock is down 38% year-to-date. At current prices, a company whose AI revenue has tripled is being priced as a victim of AI.
The same AI narrative: hardware is being scooped up, software is being abandoned. The market's subtext is brutal: the money in computing power is visible; software moats are not. The direction executives are voting with their feet coincides precisely with the stock price—the CFO is going to Marvell, a chip company.
Tonight, The Largest IPO in History Opens
Another motive for the late Thursday buying spree lies in Friday: SpaceX priced at $135 per share and officially debuts on Nasdaq tonight, ticker SPCX.
The scale of this deal is unprecedented: the base offering raises approximately $75 billion, nearly triple the previous record holder Saudi Aramco ($25.6 billion); the offering valuation is about $1.75 trillion, making it the seventh-largest US company by market cap upon listing, ahead of its sibling Tesla (approx. $1.6 trillion). Reports indicate subscription demand exceeded $250 billion, roughly 3.5 to 4 times the fundraising target. About 30% of the shares were allocated to retail investors, three times the industry norm. Musk retains over 82% of the voting power post-offering.
More noteworthy for traders is the follow-up: by rule, SpaceX will be added to the Nasdaq-100 Index 15 days after listing, at which point global index funds tracking QQQ will be forced to buy mechanically, estimated at $22 to $27 billion.
Risks are also clear. Senator Warren wrote to the SEC requesting a delay in the offering, questioning the valuation's detachment from financial fundamentals (annual revenue approx. $20 billion, implying a P/S ratio of about 88x) and the dual-class share structure; Morningstar directly gave it a "significantly overvalued" rating. There's a more practical issue: the $75 billion fundraising will drain liquidity from the secondary market within a week; part of the violent volatility in the storage and CPU sectors this week was the result of funds repositioning for the IPO.
Trend Observation
The quality of this rebound warrants a question mark.
Wednesday's 953-point plunge and Thursday's 930-point surge were driven by the same person's social media account. The draft agreement is not yet signed, confirmation from Iran still comes from unofficial channels, and historically this conflict has seen multiple reversals after being "close to a deal." If an index is pulled back from the cliff edge by a post, it can be pushed back over by another.
The inflation line also remains un-de-risked. The record surge in intermediate PPI demand is water already in the pipeline; even if oil prices peak immediately, it will still feed into CPI over the next two to three months. Pricing for a 25-basis-point rate hike in December remained unmoved after the data release; the ECB already hiked to 2.25% on Thursday, with the Fed, Bank of Japan, and Bank of England taking the stage next week. The market is betting on the perfect script: "war ends, oil prices plummet, rate hikes canceled"—all three links are indispensable.
Counterarguments are also on the table: core PPI month-over-month at 0.4% was below expectations, indicating that inflation momentum excluding energy is indeed slowing; Intel's CPU orders and Micron's demand are real orders, not sentiment; if a peace deal materializes, the inflation path corresponding to $86 oil will look completely different from this week's panic pricing. Bulls don't need a perfect script; they just need oil prices to stop making new highs.
Tonight's SPCX opening price will be the most honest gauge of this market's risk appetite. $75 billion in new shares, an 88x P/S ratio, 4x oversubscription—greed and skepticism will meet in the same candlestick.
