Wed, June 10, 2026 | 7:50AM ET

Wobble this week partly reflects cash raised to fund additional buys of SpaceX post-IPO (due to Nasdaq 100 and Russell 1000 inclusion)

Equities have wobbled in the past week pushing S&P 500 down -2.6% month to date. This is not entirely surprising given the >10% gains registered in May. But we think the upcoming SpaceX IPO is probably creating near-term wobbles:

In our view, there are several factors contributing to market turmoil in the past week:
– some investors see SpaceX IPO as setting “the top” for the market given the sheer size
– additionally, Google GOOGL, Meta META, Anthropic and OpenAI are set to raise public capital in months ahead
– US-Iran war is escalating with US launching attacks across Iran Tuesday eve
– Semis and Memory stocks are consolidating after prodigious May gains
In the near-term, we believe the upcoming pricing of the SpaceX IPO, this Friday June 12th, is probably putting some downside pressure on US equities:
– the IPO is oversubscribed by 4X (now) and likely 8X to 10X by Friday
– that means for an institution placing a $100 million order for SpaceX SPCX
– they will receive $10 to $12 million of SpaceX stock
– SPCX will be added to the Nasdaq 100 and Russell 1000 soon after IPO
– we estimate this will result in fund managers needing to acquire significant additional SPCX shares
As a consequence, in the near term, these fund managers are selling equities and raising cash to fund their upcoming IPO allocation for SPCX and the subsequent required after market buying. The IPO is $75 billion and both retail and institutional investors will need to have cash available to buy SPCX.
– keep in mind, SPCX shares are not “marginable”
– so retail investors will need to have cash available to buy
But we believe post-IPO pricing, fund managers will be buying SPCX, which we expect will be viewed as a positive signal for equities. That is, if SPCX trades well, and that is something we expect (see below).
To provide some background, it is helpful to think about how Nasdaq and Russell handle weightings for newly added constituents:
– SpaceX is a Low float/High Market cap stock
– At IPO, SpaceX is a $75 billion float (IPO), but a market cap of $1.75 trillion
– Nasdaq and Russell have different methods of constituent weighting
For Nasdaq 100, constituent weight based upon “market cap” not “float”
– that means SpaceX weighting will ultimately be based off $1.75T not the $75b IPO
– Nasdaq, initially, however has an exception for low float stocks
– the constituent weight is “3X float” or $225 billion for SpaceX, still huge
– SpaceX likely initial weight is 1.2% to 1.3% of QQQ
– Post-lockup expiry, SpaceX weight to go to 9.3%-9.5%
For Russell 1000, the constituent weight is based upon “free float” not “market cap”:
– SpaceX likely initial weight is 0.1% to 0.2% of Russell 1000
– Post-lockup expiry, SpaceX weight to go to 2.3%-2.5%
Lastly, SPCX and other companies raising capital in public markets allows public investors to have direct exposure to some of the most important companies in the World. And naturally, as these companies raise additional capital, this fuels further funding for the AI ecosystem. So, we view the upcoming IPO of SPCX as a positive for markets near-term.
But later this year, we continue to see 3 possible drivers for a drawdown:
– equity markets will test the new Fed Chair Warsh, given his varying views on measuring inflation and policy guidance
– the unlock of the IPO shares of SPCX, OpenAI, Anthropic adding to supply
– potential acute shortages of petroleum products later this year due to disruptions from US-Iran war
On Wednesday (June 10), May Core CPI will be released. We expect this to show continued upward pressure on prices due to US-Iran war. But as Fed has previously noted, these war-related price impacts are generally viewed as “one-off” but can last longer than expected.
This week we have important inflation releases with the May CPI on Wednesday and the May PPI on Thursday:
– 6/8 Mon 11:00 AM ET: May NYFed 1yr Inf Exp   3.46% vs 3.72%e
– 6/9 Tue 6:00 AM ET: May Small Business Optimism Survey    95.3 vs 96.0e
– 6/9 Tue 8:30 AM ET: Apr Trade Balance    -56b vs -57be
– 6/9 Tue 10:00 AM ET: May Existing Home Sales    4m vs 4me
– 6/10 Wed 8:30 AM ET: May Core CPI MoM    0.27%e
– 6/11 Thu 8:30 AM ET: May Core PPI MoM    0.47%e
– 6/12 Fri 10:00 AM ET: Jun P U. Mich. 1yr Inf Exp    4.9%e

BOTTOM LINE: Crypto, MAG7, Software, Small-caps lead since Iran War

We continue to see a 3-phase market in 2026. We are still in this rising phase and our original aspirational target was 7,300. We are above this level currently. We are not yet cautious, as we still see impressive market resilience, this week being an example. While oil and rates are near highs, equities are still managing to show resilience.

We continue to favor the following sectors:

MAG7 & Bitcoin & Ethereum MAGS IBIT ETHA
Industrials -> “bullet makers” XLI
Financials: Large-cap and regional banks XLF KRE
Small-caps IWM
Energy/Basic Materials XLE XLB

Wobble this week partly reflects cash raised to fund additional buys of SpaceX post-IPO (due to Nasdaq 100 and Russell 1000 inclusion)

Part I: 47 Large-cap Core Ideas: Updated list is below

Large-Cap Core Stock Ideas are large-cap stocks that appear in multiple of our investment strategies.

Consider these the stocks our top stock picks and thus, the higher quality ideas.

The Current Large-cap Core List as of 5/21/2026 is as follows:

Communication Services: GOOGL, META, NFLX, SATS
Consumer Discretionary: AMZN, TJX, TSLA
Consumer Staples: COST, MNST, PM, WMT
Energy: OKE, TPL
Financials: AXP, BNY, GS, HOOD, JPM, PNC
Health Care: LLY, MRK, UNH
Industrials: CAT, DE, ETN, GE, GEV, NOC, PWR, TT, UNP
Information Technology: AAPL, AMD, ANET, AVGO, CDNS, KLAC, MSFT, MSTR, NOW, NVDA, ORCL, PLTR
Materials: APD, CF, PKG
Utilities: VST

Part II: 64 SMID Core Ideas: Updated list is below

SMID Core Ideas are small and mid-cap stocks that appear in multiple of our investment strategies.

We believe SMID Core List could benefit from the multiple themes and secular tailwinds.

The Current SMID Core List as of 5/27/2026 is as follows:

Communication Services: RDDT, SATS, TIGO
Consumer Discretionary: DKS, DPZ, SGI, SN
Consumer Staples: BG, ELF
Energy: CCJ, DINO, DTM, UUUU, WFRD
Financials: ALLY, EWBC, GLXY, SOFI, WAL
Health Care: EXEL, HALO, NBIX, NTRA, UTHR
Industrials: AVAV, BE, BWXT, CRS, CW, DY, ENS, FIX, HII, IESC, KTOS, MLI, MOD, NXT, QXO, RKLB, STRL, VMI, WTS
Information Technology: CRDO, FN, FSLR, IONQ, LSCC, LITE, MDB, NBIS, ON, P, PATH, RIOT, RMBS, SANM, TMI, ZETA, ZM
Materials: ALB, MP, RGLD
Utilities: TLN

Key Incoming Data June:

~~6/1 9:45 AM ET: May F S&P Global Manufacturing PMI~~ Tame
~~6/1 10:00 AM ET: May ISM Manufacturing PMI~~ Tame
~~6/2 10:00 AM ET: Apr JOLTS Job Openings~~ Tame
~~6/3 9:45 AM ET: May F S&P Global Services PMI~~ Tame
~~6/3 10:00 AM ET: Apr F Durable Goods Orders~~ Tame
~~6/3 10:00 AM ET: May ISM Services PMI~~ Tame
~~6/3 2:00 PM ET: Fed Releases Beige Book~~ Mixed
~~6/4 8:30 AM ET: 1Q F Unit Labor Costs~~ Tame
~~6/4 8:30 AM ET: 1Q F Non-Farm Productivity~~ Tame
~~6/5 8:30 AM ET: May Non-Farm Payrolls~~ Hot
~~6/8 11:00 AM ET: May NY Fed 1yr Inf Exp~~ Tame
~~6/9 6:00 AM ET: May Small Business Optimism Survey~~ Tame
6~~/9 8:30 AM ET: Apr Trade Balance~~ Tame
~~6/9 10:00 AM ET: May Existing Home Sales~~ Tame
6/10 8:30 AM ET: May CPI
6/11 8:30 AM ET: May PPI
6/12 10:00 AM ET: Jun P U. Mich. Sentiment and Inflation Expectation
6/15 8:30 AM ET: Jun Empire Manufacturing Survey
6/15 10:00 AM ET: Jun NAHB Housing Market Index
6/17 8:30 AM ET: May Retail Sales Data
6/17 2:00 PM ET: Jun FOMC Decision
6/18 8:30 AM ET: Jun Philly Fed Business Outlook
6/18 4:00 PM ET: Apr Net TIC Flows
6/23 9:45 AM ET: Jun P S&P Global Services PMI
6/23 9:45 AM ET: Jun P S&P Global Manufacturing PMI
6/23 10:00 AM ET: Jun Richmond Fed Manufacturing Survey
6/24 10:00 AM ET: May New Home Sales
6/25 8:30 AM ET: 1Q T GDP
6/25 8:30 AM ET: May P Durable Goods Orders
6/25 8:30 AM ET: May PCE Deflator
6/25 8:30 AM ET: May Chicago Fed Nat Activity Index
6/25 11:00 AM ET: Jun Kansas City Fed Manufacturing Survey
6/26 10:00 AM ET: Jun F U. Mich. Sentiment and Inflation Expectation
6/29 10:30 AM ET: Jun Dallas Fed Manuf. Activity Survey
6/30 9:00 AM ET: Apr S&P Cotality CS 20-City MoM SA
6/30 10:00 AM ET: May JOLTS Job Openings
6/30 10:00 AM ET: Jun Conference Board Consumer Confidence

Economic Data Performance Tracker 2026:

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023:

______________________________
PS: If you are enjoying our service and its evidence-based approach, please leave us a positive 5-star review on Google reviews —> Click here.

Disclosures (show)

This research is for the clients of Fundstrat Direct only. Fundstrat Direct Subscription entitles the subscriber to 1 user, research cannot be shared or redistributed. For additional information, please contact your sales representative or Fundstrat Direct at fundstratdirect.com.

Analyst Certification (Reg AC)

Tom Lee, CFA, the research analyst denoted by an “AC” on the cover of this report, hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships. Neither I, nor a member of my household is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is/are the subject of this research report. There is a possibility that we will from time to time have long or short positions in, and buy or sell, the securities or derivatives, if any, referred to in this research.

Conflicts of Interest

This research contains the views, opinions and recommendations of Fundstrat Direct. At the time of publication of this report, Fundstrat Direct does not know of, or have reason to know of any material conflicts of interest.

General Disclosures

Fundstrat Direct is an independent research company and is not a registered investment advisor and is not acting as a broker dealer under any federal or state securities laws.

Fundstrat Direct is a member of IRC Securities’ Research Prime Services Platform. IRC Securities is a FINRA registered broker-dealer that is focused on supporting the independent research industry. Certain personnel of Fundstrat Direct (i.e. Research Analysts) are registered representatives of IRC Securities, a FINRA member firm registered as a broker-dealer with the Securities and Exchange Commission and certain state securities regulators. As registered representatives and independent contractors of IRC Securities, such personnel may receive commissions paid to or shared with IRC Securities for transactions placed by Fundstrat Direct clients directly with IRC Securities or with securities firms that may share commissions with IRC Securities in accordance with applicable SEC and FINRA requirements. IRC Securities does not distribute the research of Fundstrat Direct, which is available to select institutional clients that have engaged Fundstrat Direct.

As registered representatives of IRC Securities our analysts must follow IRC Securities’ Written Supervisory Procedures. Notable compliance policies include (1) prohibition of insider trading or the facilitation thereof, (2) maintaining client confidentiality, (3) archival of electronic communications, and (4) appropriate use of electronic communications, amongst other compliance related policies.

Fundstrat Direct does not have the same conflicts that traditional sell-side research organizations have because Fundstrat Direct (1) does not conduct any investment banking activities, and (2) does not manage any investment funds.

This communication is issued by Fundstrat Direct and/or affiliates of Fundstrat Direct. This is not a personal recommendation, nor an offer to buy or sell nor a solicitation to buy or sell any securities, investment products or other financial instruments or services. This material is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice.
The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.
Intended for recipient only and not for further distribution without the consent of Fundstrat Direct.

This research is for the clients of Fundstrat Direct only. Additional information is available upon request. Information has been obtained from sources believed to be reliable, but Fundstrat Direct does not warrant its completeness or accuracy except with respect to any disclosures relative to Fundstrat Direct and the analyst’s involvement (if any) with any of the subject companies of the research. All pricing is as of the market close for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, risk tolerance, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies. The recipient of this report must make its own independent decision regarding any securities or financial instruments mentioned herein. Except in circumstances where Fundstrat Direct expressly agrees otherwise in writing, Fundstrat Direct is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice, including within the meaning of Section 15B of the Securities Exchange Act of 1934. All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client website, fundstratdirect.com. Not all research content is redistributed to our clients or made available to third-party aggregators or the media. Please contact your sales representative if you would like to receive any of our research publications.