Week Ahead: US Inflation Test, an Expected ECB Hike and a Record SpaceX Listing

Week Ahead: US Inflation Test, an Expected ECB Hike and a Record SpaceX Listing

Investors head into the week of June 8 on the defensive, after the steepest equity selloff since the autumn left them facing a US inflation report on Wednesday, a likely European interest-rate increase on Thursday and the largest stock-market debut on record on Friday.

The selling started Friday, when US employers added 172,000 jobs in May, roughly double what economists had expected. The jobless rate held at 4.3% and the previous two months were revised higher. The figures undercut bets that the Federal Reserve's next move would be a cut. The S&P 500 fell 2.6% to 7,383.74, its worst session since October and enough to end a nine-week run of gains. The Nasdaq Composite dropped more than 4% as chipmakers led the retreat. The Cboe Volatility Index, Wall Street's fear gauge, jumped about 40% to 21.51. Treasury yields rose across the curve, with the 10-year note climbing to 4.55% and the 30-year bond topping 5%.

That backdrop raises the stakes for Wednesday's consumer-price data, the first major inflation reading since Kevin Warsh took over as Fed chair.

US CPI in focus

The Labor Department releases May CPI at 8:30 a.m. in Washington, with producer prices to follow on Thursday. Inflation has been running hot. Headline CPI rose 3.8% in the year to April, the fastest pace since 2023 and up from 2.4% in February, lifted by higher energy costs after this spring's conflict with Iran. Forecasters expect a May reading of around 3.5% to 3.6%, with the core rate near 2.8%.

A hotter number, on top of Friday's jobs report, would harden the view that the Fed is done cutting for now. Money markets are already pricing roughly a 40% chance of a rate increase by December, a scenario few entertained a month ago. A softer print would offer the only near-term relief for bonds and the dollar before Fed officials enter their pre-meeting quiet period ahead of the June 16-17 decision. The benchmark rate stands at 3.50% to 3.75%, and policymakers are widely expected to leave it unchanged. Investors will instead focus on the updated projections and Warsh's first news conference as chair.

ECB set to tighten

The European Central Bank looks poised to move in the opposite direction. Money markets see a quarter-point increase as all but certain on Thursday, which would lift the deposit rate to 2.25% and mark only the second hike of the cycle among major central banks. Euro-zone inflation accelerated to 3.2% in May, the highest in more than two and a half years.

Officials have prepared the ground. Chief economist Philip Lane said recently that an "active response may be required" to address inflation driven by higher energy prices. Board member Isabel Schnabel has gone further, saying a June hike "will be needed" and that the central bank can no longer look through the shock. New staff forecasts will accompany the decision, and President Christine Lagarde's news conference in Frankfurt will be watched for signals on whether further increases are coming. The complication is that the euro-zone economy shrank in the first quarter, its first contraction since 2022.

The split between the two central banks has wrong-footed the year's popular bet against the dollar. The greenback firmed after Friday's jobs data, the euro slipped to $1.1519, its weakest since April, and the yen traded near 159 per dollar. The Bank of Canada, which also meets Wednesday, is expected to keep its key rate at 2.25%.

Oil, ceasefire and sanctions

Crude prices remain the market's main gauge of geopolitical risk. Brent settled near $93 a barrel and US crude near $91, down from April's spike above $117 but still about 40% higher than a year ago. Prices firmed after Hezbollah on June 4 rejected a US-brokered ceasefire between Israel and Lebanon, dimming hopes that the Strait of Hormuz, a key shipping route still operating below capacity, would soon reopen. Iran has renewed threats to close the waterway. OPEC and its allies agreed on June 7 to raise output by a further 188,000 barrels a day in July.

Two other developments bear watching early in the week. The European Union is expected to unveil a 21st package of sanctions on Russia on Monday or Tuesday, which may freeze the $60 cap on Russian oil exports. On trade, the 10% baseline US tariff that replaced the emergency duties struck down by the Supreme Court in February is due to lapse on July 24, leaving a four-week window, even as the US Trade Representative floated new levies on 60 trading partners last week.

Earnings: the AI trade tested

Two earnings reports will test an artificial-intelligence rally that wobbled on Friday. Oracle reports after Wednesday's close, with analysts looking for earnings of $1.96 a share on revenue of $19.1 billion. Its cloud guidance and order backlog have become a closely watched proxy for AI demand ahead of Nvidia's next results. Adobe follows on Thursday, with attention on how quickly it is turning its AI tools into revenue.

SpaceX heads to market

The week closes with a milestone. Elon Musk's SpaceX is due to begin trading on Nasdaq on Friday under the ticker SPCX, in what would be the biggest initial public offering on record. The company is targeting a valuation of about $1.8 trillion, trimmed from an earlier goal above $2 trillion after feedback from investors, and aims to raise roughly $75 billion by selling about 555.6 million shares at $135 each. Pricing is expected on Thursday evening.

The size has no precedent. The deal would more than double Saudi Aramco's 2019 listing, which raised about $26 billion and held the record for years. SpaceX reported revenue of $18.7 billion in 2025, led by its Starlink satellite-internet business, but posted a net loss after absorbing costs from its merger with xAI. At the proposed price, the company would trade at roughly 94 times trailing sales.

Supporters point to Starlink's fast-growing subscriber base and a reach that spans rockets, communications and computing. Skeptics, among them Morningstar, argue the price has run well ahead of the fundamentals. The company was valued at about $800 billion as recently as December, before the xAI deal lifted it to $1.25 trillion in February. The debut will give a clear read on investor appetite for richly valued growth stocks after a week that tested it.

Key dates

• Tuesday: China CPI and PPI for May

• Wednesday: US May CPI; Bank of Canada rate decision; UK monthly GDP

• Thursday: ECB rate decision and news conference; US May PPI; Oracle and Adobe earnings

• Friday: SpaceX expected to begin trading; University of Michigan consumer sentiment