Morning Bid: SpaceXhaust

• Markets now fully price in a Fed rate hike for September with over 50% odds of two hikes by year-end, pressuring tech valuations
• SpaceX fell below its IPO price after announcing debt-raising plans, reversing all initial trading gains despite strong early retail investor interest
• Global tech selloff spread to Asian markets with South Korea's KOSPI down nearly 10% on Tuesday, while oil prices dropped below $80/barrel on easing geopolitical tensions

Market Summary: Tech Selloff Deepens Amid Rate Concerns

Key Market Movements:

Big Tech megacaps led a broad market decline on Monday, with Alphabet and Amazon retreating on concerns about elevated interest rate expectations, high AI infrastructure spending, and rising debt levels. SpaceX suffered its biggest loss since its IPO, plunging 16% despite announcing new debt-raising plans. The selloff dragged the S&P 500 and Nasdaq lower, while chipmakers outperformed ahead of Micron's Wednesday earnings.

Rate Outlook Weighs on Markets:

A September Fed rate hike is now fully priced in, with over 50% probability of two hikes by year-end. This hawkish outlook pressured equities broadly, with Nasdaq futures down more than 2% in pre-market trading Tuesday.

Global Impact:

Asian markets followed Wall Street's lead, with South Korea's KOSPI tumbling nearly 10% on Tuesday, partly due to won weakness. The Japanese yen approached 40-year lows despite last week's Bank of Japan rate hike, with intervention concerns mounting amid reported discussions between Tokyo and Washington officials.

Commodities and Energy:

Oil prices fell below $80 per barrel, with Brent crude trading around $77/bbl on news of returning flows through the Strait of Hormuz and a 60-day U.S. waiver on Iran sanctions following initial peace talks.

UK Political Development:

Prime Minister Keir Starmer's resignation left UK markets relatively calm, with focus shifting to successor Andy Burnham's appointment timeline and finance minister selection.

Upcoming Catalysts:

Tuesday's data includes flash U.S. and global business surveys for June, though these predate recent oil price declines.