PrintUS STOCKS-S&P 500, Dow rise on Mideast deal hopes, SpaceX's historic debut
BY Reuters | ECONOMIC | 06/12/26 12:46 PM EDT* Indexes: Dow up 0.76%, S&P 500 up 0.51%, Nasdaq up 0.27%
* U.S. equity funds record first weekly outflow in three weeks
* SpaceX surges after public debut, set for $2 trln in market cap
* Space stocks slide after rallying ahead of SpaceX debut
* Adobe drops after exit of CFO Dan Durn (Updates prices throughout; adds remarks from Iran and analyst comment)
By Johann M Cherian and Twesha Dikshit
June 12 (Reuters) - 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 U.S. President Donald Trump said a deal was close.
The spotlight was on SpaceX. Its shares rose 22% to $163, well above the IPO price of $135 apiece, valuing the company at more than $2 trillion.
SpaceX is now ranked among the biggest publicly listed U.S. companies.
On the other hand, shares of Tesla, Musk's other company that also trades at a premium to its earnings, fell 2%.
Only about 3% to 4% 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
Nine of 11 major S&P 500 sectors moved higher, with energy leading gains. It rose 1.7%.
Chip stocks were volatile, with Nvidia
U.S. 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 U.S. stocks and bitcoin's 16% 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%, to 51,234.16, the S&P 500 gained 37.70 points, or 0.51%, to 7,432.00 and the Nasdaq Composite gained 71.59 points, or 0.27%, to 25,881.25.
The three main U.S. 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.
SpaceX, which also includes Starlink and xAI, has already defied some Wall Street conventions. Index providers such as Nasdaq and FTSE Russell have tweaked their entry requirements for its inclusion, while the company also set its stock price at $135, even before the roadshow began, reflecting Musk's sway over the IPO.
Some analysts have, however, voiced caution over the fundamentals of the company, which posted more than $4 billion in annual losses last year.
On the macro front, a survey showed that consumer sentiment fared better than expected this month, while data earlier this week showed inflation pressures were mounting.
However, following Trump's remarks on Thursday, traders pushed their expectations for an interest rate hike by the Federal Reserve to December from October earlier this week, the CME Group's FedWatch tool showed.
Adobe slid 6.8% after the exit of CFO Dan Durn.
Advancing issues outnumbered decliners by a 2.18-to-1 ratio on the NYSE, and by a 1.48-to-1 ratio on the Nasdaq.
The S&P 500 posted 35 new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 166 new highs and 73 new lows.
(Reporting by Johann M Cherian, Twesha Dikshit, Niket Nishant in Bengaluru and Laura Matthews; Editing by Shinjini Ganguli)
