The Overnight Report: Dow Up, SpaceX Down

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This story features WISETECH GLOBAL LIMITED, and other companies.
For more info SHARE ANALYSIS: WTC
The company is included in ASX50, ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH

Selling in the Mag7 and SpaceX dragged down Nasdaq with lower oil prices supporting other sectors, allowing the Dow Jones to buck the trend.

After retreating slightly on Monday, ASX200 futures are pointing to a positive start for Tuesday.

Good Morning,

On Monday, the Australian market slipped -13 points or -0.14% to 8.816 led by Technology, down -4.2%.

WiseTech Global ((WTC)) shares dived -18.44% on media reports of an AFP investigation into founder Richard White.

Financials rose 0.5%.

Shares in SpaceX have continued to come back to Earth, declining another -16% overnight.

The stock at the close of trade is about 14.5% above its IPO price.

Today’s Big Picture, J.L.Bernstein

Oil Cools as the US and Iran Find a Path

Qatar and Pakistan brokered a 60-day roadmap toward a final US-Iran deal, and Treasury issued a license letting Iran sell oil again, including to us.

Crude fell as supply fears eased. The honest catch is timing.

The Strait of Hormuz still needs clearing, and that runs in weeks, not days.

The Giants Drag

Alphabet is having its worst day in over a year after Nobel-winning DeepMind scientist John Jumper left for Anthropic, and the timing stings with a huge stock sale on deck.

SpaceX fell a third straight day as it tapped the bond market for the first time to clear a bridge loan.

Those two names alone pulled the S&P and Nasdaq red.

Memory Is the Hottest Trade on the Board (still)

Micron climbed today as analysts stacked up price-target hikes ahead of Wednesday’s earnings.

Over in Korea, SK Hynix passed Samsung to become the country’s most valuable company on AI memory demand.

Apple is even blaming memory costs for new price hikes.

Key Themes and Movers on the Day, Chris Weston, Pepperstone extract

There’s been several key themes and notable intraday moves that traders have targeted. These are far from dull markets.

While the world is becoming less sensitive to moves in crude and to the geopolitical headlines coming out of Switzerland, the crude market and the associated energy trades are at a very interesting juncture.

Brent crude futures tried their best to stage a reversal higher, pushing up to US$82.30 before the sellers took control and smacked pricing back down to lows of $US77.23. 

The focus has shifted to the increasing flow of commercial vessels through the Strait of Hormuz, with crude pricing subsequently falling through Friday’s lows and below the 200-day moving average at US$78.69. 

Those already running shorts, or looking to re-engage with that directional call, are now eyeing a break of last week’s low at US$76.54. 

The moves lower in crude have been a tailwind for gold, which has worked well in the face of further USD upside, US 10yr real rates rising by 8bp, and a breakout to new cycle highs.

That is a big development for markets, particularly as terminal Fed pricing has also shifted higher by 8bps.

The market currently assigns just a 36% probability of a Fed hike in late July, and by the time Warsh appears before Congress, policymakers and investors will have the core PCE report, June payrolls, and the June CPI inflation report in hand.

That should provide a much clearer picture of whether the Fed can credibly guide toward a near-term hike.

Personally, a hike in July still feels early, although I think the swaps market is right to assign a residual probability of hikes at that meeting, while increasingly viewing September as the more realistic point for further action if the data continues on its current trajectory.

In equity markets, the dominant theme was once again rotation. The MAG7 basket has struggled, falling -2.2%, with notable weakness in Alphabet, Amazon, and Microsoft, whilst SpaceX has seen sellers dominate, with shares falling -16%.

The former generals of the market appear to have lost momentum, and investors are rotating into other areas of the market that are more defensive, less AI-focused, and offer more predictable cash flows.

Memory stocks continue to perform well, however, with Micron up 6.8% ahead of earnings tomorrow after the close.

The options market is implying a plus or minus -10% earnings day move following the result, so vol seems assured.

The Market’s Most Important Two Weeks in 2026 Start Now, Lance Roberts extract

Wall Street keeps getting more bullish. One of the most unusual developments in today’s market is that 2026 earnings estimates continue to move higher, while 2027 forecasts are becoming even more aggressive. 

Normally, analysts cut estimates as the year progresses. Instead, they’re raising them. What’s even more interesting is that this type of earnings acceleration is usually seen coming out of a recession, when profits are rebounding from depressed levels.

Today, analysts are forecasting a similar surge in earnings growth without a recession ever occurring. As long as forward earnings estimates keep rising, they provide support for higher stock prices.

Investors are willing to pay more for stocks if they believe future profits will justify those valuations. The risk, of course, is that those earnings eventually have to materialize. Beyond earnings, market flows remain incredibly supportive.

Retail investors are pouring money into equities at a record pace. Annualised inflows into U.S. stocks are running near US$739 billion, the highest level ever recorded.

Technology alone is attracting roughly US$154 billion in annualised inflows, with semiconductors and AI-related companies capturing a large share of that capital.

At the same time, passive investing continues to funnel money into the largest companies in the market. New-quarter contributions, retirement accounts, institutional allocations, and other automatic investment programs will begin another cycle of inflows as July starts.

Before that happens, the market faces what could be its most important short-term test of the year. The next two weeks will be dominated by market plumbing rather than economic fundamentals.

Following the massive US$8.2 trillion options expiration, attention now shifts to pension rebalancing, quarter-end positioning, and other flow-driven events that can create temporary volatility. If a meaningful pullback is going to happen, this is the window where it is most likely to occur.

The bullish case remains straightforward: rising earnings estimates, record retail participation, strong passive inflows, and continued enthusiasm around AI and technology.

The bearish case is much narrower and largely centered on short-term positioning and rebalancing risks.

If the market can navigate the next two weeks without a significant hiccup, the path of least resistance may remain higher as fresh capital enters the market at the start of the third quarter.

The next 14 days could determine whether this rally simply pauses—or gains another leg higher.

US Equity Strategy Quick Take, RBC Capital, Lori Calvasina extract

Late last week, sandwiched between Wednesday’s Fed meeting and the Friday holiday in the US (in which the US equity market was closed), we spent a day meeting with Canadian-based investors in US equities.

A group of investors that tends to know the US as well as the domestically based stock pickers we spend most of our time talking to, but has a knack for the macro and bigger picture on par with our European-based clients, making them a unique and helpful group to talk to when equity markets are at an interesting juncture.

While we discussed a range of topics, and the investors we spoke with generally described themselves as cautiously optimistic, the main thing that jumped out to us was the air of anxiety that permeated most of our conversations.

There were two issues that came up frequently and took up a fair amount of time in our bigger group meetings which contributed to our view here.

First, Wednesday’s Fed meeting was very much in focus. Our RBC colleagues in US Rates Strategy and US Economics have highlighted the press conference’s emphasis on inflation over labor in their recaps, and it was clear to us that the investors we spoke with had also picked up on this dynamic and were focusing on it in their own post-mortem discussions.

One investor also noted  there was simply more uncertainty emanating from the Fed outlook going forward.

We spent a fair amount of time walking through our own valuation/EPS model that shows how strong earnings could offset the P/E compression that might be accompanied by a few hikes and lingering inflation challenges, along with our historical analysis that shows the US equity market tends to perform well in 12-month time frames that see hikes in the 0-100 basis point range.

In response, one investor wondered out loud whether the Fed would really just stop at a few hikes.

Second, most of the investors we spoke with didn’t seem to be assuming that the end of the war in the Middle East was a done deal.

While the heightened anxiety around the Fed outlook appears to us to be a challenge for US equities, ongoing skepticism about the end of war helps explain why futures were only down slightly on Sunday evening amid the latest diplomatic setbacks.

Note that within the discussion of the Middle East in last week’s meetings, we also detected a fair amount of uncertainty about the path of oil prices and headline inflation from the investors we spoke with.

Other topics covered regularly in last week’s meetings –-which all contained their own hints of anxiety-– included trends in AI capex, midterms, whether Semis profit taking had played out yet (we noted Russell3000 Semi & Semi Equipment valuations remained near post Tech bubble highs on our work, and that in our mid-May Europe/UK meetings we’d sensed a desire by some investors, who’d been in Semis and had been performing well, to explore other opportunities),

As one investor put it whether “valuations even mattered” (we suggested that they did, and noted that the forward NTM P/E of the biggest market cap names in the S&P500 had come close to their previous peaks in recent trading, which had helped usher in the latest wobble in the S&P500 and bout of broadening leadership in June).

We’ve been keeping a close eye on daily forward P/Es for the S&P500, its top 10 market cap names, the Russell2000, and the Nasdaq100, and didn’t see any significant changes in our latest updates.

We’ve also been keeping a close eye on sentiment-related data points including the weekly AAII investor survey. Sentiment on the equity market outlook in that survey improved in last week’s update, but still remained slightly pessimistic. 

Meanwhile, we were struck by the improvement in CEO confidence that was reported in the 2Q26 Business Roundtable survey that was released last week.

According to the press release from the survey, the overall CEO confidence Index moved up to its highest reading since 4Q24 and at 91 was well above its long-term average of 83.

We remain constructive on the US equity market outlook in the year ahead with a 7,900 12-month S&P500 price target (where as noted previously we see some upside risk), but have not believed that the path higher for stocks would necessarily be a linear one.

Last week’s Fed meeting keeps us vigilant for a potential short-term pullback in US equities driven by increased indigestion around the interest rate/Fed outlook.

Recent Middle East developments remind us the geopolitical backdrop is likely to remain a risk factor in the US equity outlook for some time to come.

Still, as long as recession concerns remain low, and expectations for Fed hikes/interest rate increases remain moderate, we expect pullbacks in the S&P500 to stay contained in the -5 to -10% range.

Corporate news in Australia:

• Iluka Resources ((ILU)) signs its first binding rare earths contract
• Credit Corp ((CCP)) has withdrawn its takeover offer for Humm Group ((HUM))
• Atlas Arteria ((ALX)) is considering a sale of its German motorway asset while increasing distributions to investors as IFM Investors’ stake approaches 40%, intensifying takeover expectations
• Kudu Investment Management will sell its majority stake in Channel Capital as part of a merger transaction involving Fidante
• SGH Ltd ((SGH)) approved a $500m share buyback
• Comet Ridge raised $45m to fund the acquisition of Santos’ ((STO)) stake in the Mahalo gas project
• Private equity owner of The Cheesecake Shop is expanding its food retail portfolio through investments in burger and frozen yoghurt chain Yo My Goodness
• Centuria Capital ((CNI)) raised $300m to accelerate growth of its ResetData platform, targeting increased exposure to data centre infrastructure assets

On the calendar today:

-XX Global June PMIs

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The Australian share market over the past thirty days…

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