NEW YORK: The benchmark S&P 500 and the blue-chip Dow rose in choppy trading on Friday, aided by expectations for an imminent end to the Middle East conflict, while SpaceX shares surged in their debut, making it Wall Street’s biggest public listing in history.
Iran said that an “Islamabad Memorandum of Understanding” for addressing the conflict had “never been closer”, which aided risk sentiment broadly, a day after US President Donald Trump said a deal was close.
The spotlight was on SpaceX. Its shares rose 22 percent to USD163, well above the IPO price of USD135 apiece, valuing the company at more than USD2 trillion.
SpaceX is now ranked among the biggest publicly listed US companies.
On the other hand, shares of Tesla, Musk’s other company that also trades at a premium to its earnings, fell 2 percent.
Only about 3 percent to 4 percent of SpaceX’s shares are expected to be available for trading, with a large allocation to retail investors.
“The fact that the IPO opened and traded smoothly is important because the market was watching this less as a pure SpaceX event and more as a test of whether investors could absorb very large AI/space-linked supply without creating stress elsewhere,” said Chris Murphy, co-head of derivatives strategy at Susquehanna.
IPOs of AI companies OpenAI and Anthropic are also highly anticipated later in the year.
Shares of other space stocks, which have soared in the lead-up to the debut, eased on Friday. Rocket Lab fell 9.1 percent, Intuitive Machines and Planet Labs shed 13.4 percent and 10.2 percent, respectively, while funds holding shares of SpaceX such as Fundrise Innovation Fund rose 3.3 percent.
Nine of 11 major S&P 500 sectors moved higher, with energy leading gains. It rose 1.7 percent.
Chip stocks were volatile, with Nvidia flat, while Advanced Micro Devices added 5 percent after Citigroup raised its rating to “buy” from “neutral”. Megacaps such as Amazon.com and Apple slipped 2 percent and 1.4 percent, respectively.
US equity funds saw their first weekly outflow in three, and earlier this week the technology index confirmed a correction. Analysts believe some of the weakness in US stocks and bitcoin’s 16 percent fall last week could be due to traders trimming holdings ahead of SpaceX’s debut.
At 12:15 p.m. ET, the Dow Jones Industrial Average rose 385.41 points, or 0.76 percent, to 51,234.16, the S&P 500 gained 37.70 points, or 0.51 percent, to 7,432.00 and the Nasdaq Composite gained 71.59 points, or 0.27 percent, to 25,881.25.
The three main US stock indexes are set for small weekly gains, amid uncertainty surrounding the Iran conflict and concerns that a rally in AI stocks has gone too far.