Will SpaceX Kill the Market?
What a week! Nvidia (NVDA) closed out a whopper of an earnings season, SpaceX is coming public, and the bulls kept us within striking distance of all-time highs.
So I'll ask a dangerous question.
Will SpaceX Kill the Market?
Elon Musk's SpaceX dropped its IPO filing this week, revealing billions in losses and a sky-high valuation.
And there's other issues, like index companies changing the rules to get SpaceX into mainstays like the S&P 500, and Elon sucking up the voting power for himself.
Does anyone care?
It's tricky to say.
We surveyed the T3 Live community this week and asked “Do you want to buy SpaceX when it comes public?”
39.7% said yes, and 34.4% said maybe.
And at the start of the year, we asked our audience “Which IPO are you most excited for?”
- 64.1% said SpaceX
- 28.2% said OpenAI
- 3.8% said Anthropic
Given what looks like red hot retail interest and Elon's games with the index providers, I will do my best to get some SpaceX shares before the IPO.
Because it looks like the game may be rigged for the stock to pop.
No guarantees because it's common for high-profile IPOs (like recent new issue Cerebras) to sell off after hot debuts.
News reports indicate that OpenAI and Anthropic will also come public this year.
But there is a danger here – that a surge in new issues could contribute to a market top.
SEC data shows that market tops coincide with strong IPO years like 2000, 2007, 2014, and 2021.
And we are looking at three generational IPOs coming public in 2026.
I'm a little scared myself, though I am trying to scoop up some SpaceX shares myself.
What can I say? I love me some Elon Musk drama, which is why I'm long Tesla (TSLA).
The Mag 7 Mixup Is Fascinating
Mag 7 earnings are amazing. The stocks are another story.
FactSet just dropped a new set of Q1 earnings season numbers and they point to Mag 7 dominance.
All Mag 7 names beat earnings expectations, with EPS growing by 63.2%.
For the other 493 S&P 500 companies, earnings grew by 17.4%, which was impressive by itself.
However, 2026 has been a mixed bag for the actual Mag 7 Stocks.
3 of them are down YTD, and the average return is +6.5% vs. +17.5% for QQQ.
The discrepancy comes in semiconductors.
Nvidia is the only Mag 7 semiconductor stock in a year with SMH up 61%:
Nvidia's Selloff Was Normal
On Wednesday, Nvidia reported its 14th straight earnings beat.
And the stock fell -1.8%
Is this unusual? NOPE.
That the 4th straight time Nvidia sold off the day after earnings, despite another solid beat.
Here are Nvidia's prior 8 post-earning reactions:
- 4Q 2026: -5.5%
- 3Q 2026: -3.2%
- 2Q 2026: -0.8%
- 1Q 2026: +3.3%
- 4Q 2025: -8.5%
- 3Q 2025: +0.5%
- 2Q 2025: -6.4%
- 1Q 2025: +9.3%
Source: Koyfin
The stock is a toss-up after earnings.
And as you can see, it's been more down than up.
This makes sense, because the stock is widely followed and loved.
And Q1 was jam packed full of huge earnings beats from the AI complex.
Who was shocked that Nvidia's still doing well?
There Is a Bear Market in Euphoria
The latest AAII Sentiment shows that just 31.7% of investors are bullish.
This is below the long-term 37.5% average, despite the $SPX remaining in striking distance of the 7517.12 all-time high set last week.
Meanwhile, CNN's Fear & Greed index is at 61, indicating modest greed:
This is a positive for the market because it shows a lack of euphoria.
You'd think investors would be more bullish because of a mild easing of Middle East tensions and crude oil slipping.
But perhaps the crowd is more concerned about inflation and the Fed.
Either way, market tops are often (but not always) market by overly bullish sentiment.
We are not even in the neighborhood of bullish.
Speaking of the Fed…
Rate Hikes En Route?
While President Trump has been adamant we need lower interest rates, the market is pricing in higher rates following a series of hot inflation readings.
The CME's FedWatch Tool now shows the market is pricing in a 0% chance of lower rates at year-end:
Plus:
- 29.9% chance of rates staying the same
- 70.1% chance of rates going up
And that 70.1% is divided up as follows.
- 42.4% chance of 25 bps in hikes
- 22.1% chance of 50 bps in hikes
- 5.2% chance of 75 bps in hikes
- 0.5% chance of 100 bps in hikes
So why is the market so strong? Shouldn't the prospect of higher rates hurt equities?
For now, investors and traders are focused on booming corporate earnings amid a major AI-driven capex cycle.
Rate expectations can change drastically month-to-month, but the earnings/AI story ain't going away.
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