Software Index

State of the Market

SpaceX delivered one of the most successful IPOs in history, pricing at $135 per share. The company raised a record $75 billion, with shares surging ~19% on debut (closing at $160.95) and maintaining strong momentum in subsequent sessions. Underwriters fully exercised the greenshoe overallotment option shortly thereafter, purchasing an additional 83.3 million shares and bringing total proceeds to $85.7 billion—further underscoring extraordinary demand. Adding to the positive momentum, SpaceX announced its $60 billion acquisition of the leading AI coding startup Cursor just days after its IPO, meaningfully expanding its AI and enterprise software capabilities. This success underscores investor preference for companies with broad infrastructure exposure, diversified revenue streams, and proven execution in high-growth domains.

Anthropic and OpenAI have both advanced significantly toward public markets, with Anthropic filing its confidential S-1 on June 1 after raising $65 billion at a $965 billion valuation, and OpenAI submitting its own confidential S-1 shortly thereafter. This robust AI IPO pipeline reflects strong investor confidence in the sector.

A preliminary framework agreement between the U.S. and Iran has been reached to end active hostilities, reopen the Strait of Hormuz, and lift the U.S. naval blockade. This positive development is expected to lower energy costs, ease supply chain pressures, and deliver a strong boost to international travel and related sectors. The memorandum of understanding is scheduled for formal signing on June 19, followed by a 60-day ceasefire period, paving the way for further constructive discussions on Iran’s nuclear program.

U.S. markets responded with enthusiasm to the news of the agreement. The Dow Jones hit a new record close on the first trading day following the announcement, fueled by strength in cyclical, travel, and leisure stocks. Oil prices declined more than 5.0% amid expectations of increased global supply from the reopened Strait of Hormuz, providing welcome relief that supports broader economic growth and corporate earnings.

The labor market has shown underlying resilience throughout this period. May non-farm payroll employment rose by 172,000, with the unemployment rate holding at 4.3%. Gains were concentrated in leisure, hospitality, and health care, indicating that consumer-facing demand has remained reasonably steady even as external pressures built earlier in the spring. Broader economic activity has also held up. Q1 GDP was revised to a middling 1.6% annualized pace, supported by ongoing consumer spending.

Inflation had been running hotter in part because of energy. The May CPI rose 4.2% year over year, marking a three-year high. A sustained decline in oil prices following the mid-June framework should provide some offset in the months ahead, though it will take time for lower energy costs to work fully through consumer prices. Core measures had already shown some firmness from tariff-related and other input pressures.

The Federal Reserve has maintained a patient and steady posture. With the federal funds rate in the 3.50-3.75% range, policymakers continue to remain data-dependent, allowing them to carefully evaluate evolving domestic trends. Chair Kevin Warsh is chairing his first FOMC meeting this week, providing an opportunity to set a constructive tone for the central bank's approach amid stabilizing conditions. The recent reduction in energy price pressures further supports this measured stance, giving policymakers additional flexibility to assess economic developments in a positive environment.