These are the early headlines and other items poised to influence the market at the start of trading Friday. As we share this collection of market drivers, futures point to a lower market open when U.S. equities begin trading.
1. Investors expect heavy trading volume on Friday to reflect changes to the Russell indexes, including reclassifications for megacaps like Microsoft and the Russell 1000’s “fast-track” addition of SpaceX following the recent IPO. Fund managers will adjust their portfolios to reflect new weightings in various indexes being reorganized by FTSE Russell in one of its biggest shifts on record… SpaceX stock will be classified as about 90.4% growth and 9.6% value, which means it will become a big part of growth investments tied to the Russell 1000. Other major stocks affected will be Apple and Microsoft, which will be in the Russell 1000 value and growth indexes instead of just growth. (Reuters)
We’ve seen the impact on trading volumes when a position in the Pro Portfolio is added to a market-tracking index. The most recent was Marvell’s (MRVL) addition to the S&P 500 earlier this week, and next week, Google (GOOGL) will join the Dow Jones Industrial Average.
Today’s total reconstitution day trade is estimated at nearly $150 billion, which is why it is being referred to as a “key liquidity day.” This likely helps explain some of the pressure we’ve seen in the market as institutional and other investors look to reposition themselves to match changes to the indexes they either track or are benchmarked against. With the FTSE Russell changes occurring after Friday’s market close, it could be a volatile day, especially toward the end of the trading as fund managers attempt to minimize the “tracking error” between their funds’ performance and the index that can result if their buy-in price differs from the closing price.
2. OpenAI is leaning toward holding off its initial public offering until next year, three people involved in the company’s deliberations said, a turnabout that punctuates the uncertain future for fast-rising artificial intelligence giants… But a cascade of recent developments has caused OpenAI’s executives to shift away from their most aggressive aspirations. Top of mind is what has happened to Elon Musk’s SpaceX after its I.P.O. this month. It was the largest ever, raising more than $85 billion and reaching a valuation of $1.77 trillion on its debut. Since then, SpaceX’s stock has been on a downward slide, as shares slumped to $153 at the end of the trading day on Thursday after reaching a high of $202 last week. (NY Times)
This reaffirms why we think it is important to follow not only the pricing of IPOs but also how they trade in the wild. To be fair to SpaceX (SPCX), the oversubscribed Cerebras (CBRS) IPO fell below the $185 public offering price yesterday. We will want to closely watch upcoming IPO transactions and how they trade to gauge if this is more of a tech-related issue or something larger that could impact second-half 2026 investment banking fee expectations.
As it relates to the Portfolio’s position in SuRo Capital (SSSS), the timing for OpenAI’s expected IPO remains a meaningful milestone for the company. However, let’s also remember it is only one of SuRo’s holdings poised to go public in the coming quarters, and as of March 31, OpenAI was SuRo’s second-largest portfolio holding, well behind Whoop.
3. Oil prices fell on Friday amid signs that ships were continuing to move through the Strait of Hormuz despite an Iranian attack on a container ship the day before. The price of Brent crude, the global benchmark for oil, declined over 3 percent to about $73 a barrel. West Texas Intermediate crude, the U.S. benchmark, fell to between $69 and $70 a barrel. (NY Times)
We’ll continue to track developments in and around the strait, but so long as the volume of ships crossing the strait continues to grow, the more likely inflation and supply-chain efforts will ease in the coming months. We continue to think calls by Bank of America (BAC) and others for multiple rate hikes this year are overly aggressive.
4. Samsung Group will pledge on Monday 1,000 trillion won ($648 billion) in South Korea over the next decade, a media report said, in a sweeping effort to turn a global AI-driven chip boom into a nationwide growth engine… Samsung’s investment will include spending on AI data centres, batteries and displays as well as a potential 300 trillion won push to build chip factories in the country’s southwest, it said without citing sources. (Reuters) Icheon-based SK Hynix has signaled plans to spend to expand production capacity and meet runaway demand for memory from the artificial intelligence industry and the broader tech sector. The company plans a $29 billion US listing, after Chairman Chey Tae-won said earlier this month that he intends to double capacity over the next half decade. (Bloomberg)
We’ll add these potential announcements to our list of things to watch for next week. As we are fond of saying, the details will matter, but on their face, these pending announcements look to be the latest shot in the arm for digital infrastructure demand and chip manufacturing equipment.
5. Apple shares fell sharply Thursday after the tech giant raised prices on a number of its signature products to make up for what it said were skyrocketing memory prices resulting from the AI boom… Apple had announced that prices for its MacBook Neo, MacBook Air, iMac and iPad product lines would all rise, in some cases by as much as $200. Apple didn’t raise the prices of the iPhone, the Apple Watch and AirPods. (NBC News)
That announcement weighed on Apple’s (AAPL) shares Thursday, but it wasn’t the only company to announce a hardware price increase. Microsoft (MSFT) announced prices for its 512-gigabyte Xbox model would increase by $100 and the 1-terabyte model by $150, effective Aug. 1. At Microsoft, Xbox hardware is a relatively small part of the revenue and profit stream, while at Apple, overall, Mac and iPad sales account for ~10% of overall revenue.
In our view, it’s a balance between protecting margins and not pricing the product out of the market. Given the lead-up to this announcement with comments by outgoing CEO Tim Cook, we suspect Apple has done a fair bit of testing and sensitivity analysis around this move. This leads us to conclude the overall impact will be modest, but we will be looking to see what Apple’s pricing plan is for its upcoming iPhone models that should launch in late Q3 2026.
6. Elon Musk’s SpaceX has told investors that it plans to launch a new Starlink mobile service for US consumers, in a move that would upend the country’s multibillion-dollar phone network market. The company’s president and chief operating officer Gwynne Shotwell told investors during a recent IPO roadshow that the group was considering launching a Starlink retail product and could build its own terrestrial US mobile network, according to four people familiar with the matter. (FT)
Building on the satellite services offered by Apple and SpaceX’s Starlink home internet service, it seems like a natural evolution and one that could disrupt the business model at existing wireless service providers like Verizon (VZ) and AT&T (T). It also raises questions about Amazon’s (AMZN) potential plans as it builds out its Amazon Leo business and closes its pending acquisition of Globalstar (GSAT). Amazon has flirted with wireless service before, in part with its long-discontinued Fire Phone, but we also know the company is keen on building recurring revenue streams and bundling its services. Odds are SpaceX is thinking the same thing.
7. Economic data today per TipRanks: Advance Retail and Wholesale Inventories (May), University of Michigan Consumer Sentiment Index (June, Final).
8. Companies reporting today per TipRanks: AM – Apogee Enterprises (APOG).
More Pro Portfolio:
- Putting Our Palantir Game Plan Into Action
- Tracking 21 Signals Across 10 of Our Investing Themes
- Weekly Roundup: Peace Deal, Warsh Arrives, and the Portfolio Moves Ahead
At the time of publication, TheStreet Pro Portfolio was long AAPL, AMZN, BAC, GOOGL, MRVL, MSFT, and SSSS.
