Less than a day after declaring peace talks with Iran were “very boring,” President Donald Trump has seemingly switched focus to something he never seems to tire of—and it’s likely to test one of the longest market rallies in nearly three decades.

The Trump administration unveiled plans to revive its dormant tariff strategy—the bulk of which was struck down by the Supreme Court earlier this year—with proposed levies on a host of major trading partners. 

A separate raft of duties, tied to section 301 tariff rules that give the government tremendous leeway, are expected over the coming weeks. 

Stocks aren’t reacting to the new round of duties as yet, but new developments in the U.S. war with Iran—which included attacks on key targets in the Islamic republic and a wave of attempted drone strikes from Tehran—are keeping markets in check.

Global oil prices have been marching higher, taking Brent crude close to the $96 a barrel mark, while Treasury bond yields renewed their selloff with 30-year paper back to within a whisker of the 5% mark.

Stocks, meanwhile, look set to test their nine-day rally, the longest in a year, which has generated five consecutive record highs for the S&P 500 and put the benchmark on pace for its best run of gains since 1995.

Tariffs aren’t likely to be the straw that broke this record run’s back, but they do suggest a shifting focus for a president who has grown weary of the stalemate in the Gulf region and is perhaps looking for a way to bolster support for his Republican colleagues as midterm elections loom.
And the tech-led rally, which has lifted the Nasdaq more than 30% since its late March lows, is starting to feel vulnerable.

—Martin Baccardax

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AI investors have a bad case of FOMO. Marvell Technology’s 32% stock rally Tuesday is the latest sign the “fear of missing out” on artificial intelligence influences a lot of investors’ decisions these days. But when market speculation overtakes the actual fundamentals, the risks of a sharp reversal increase.

• Marvell and other tech hardware stocks are rising on relentless demand for the hardware needed to build AI data centers. But Steve Sosnick, chief strategist at Interactive Brokers, says sharp uptrends or parabolic moves are a sign of speculation, or chasing momentum, and less about serious analysis.

HPE’s large rally followed strong earnings, but it’s been a good year for the stock already. The risk is that eventually, hyperscalers and other big tech hardware spenders will pull back their investments. Any indication of that could lead to a selloff for shares of those benefiting from AI spending.

• Other stocks are jumping from speculative trading as AI excitement spreads. Fluence Energy soared 44% on Monday after the advanced battery energy storage company joined a deal to work with Nvidia on developing data centers. AI chip maker Cerebras Systems jumped 68% on its IPO day last month.

• Sosnick compared the behavior to a popular NYC harbor cruise. “When you go by the Statue of Liberty, everybody rushes to one side of the boat, and then the boat turns around, everybody rushes to the other side,” Sosnick said. “Nobody wants to be left behind on a big move.”

What’s Next: Broadcom stock closed at a record on Tuesday, pushing its market value above $2 trillion. The stock has rallied for the past four trading sessions, gaining 14%, a hot streak can be attributed to general excitement ahead of Broadcom’s earnings report today.

—Angela Palumbo, George Glover, and Mackenzie Tatananni

Sportsbooks like DraftKings have been under pressure over the past year by prediction markets, which offer futures contracts that closely resemble sports bets. Now prediction markets are expanding beyond those contracts, putting a new industry under pressure: financial exchanges.

• Kalshi, one prediction market platform, offers trading in perpetual futures linked to Bitcoin, something the CFTC just approved. Unlike a typical event contract on a prediction market, perpetuals don’t have an expiration date, and traders can apply leverage to their positions. They aren’t offered on traditional exchanges like the CME. 

• Perpetuals have been available overseas but are a new product in the U.S. Kalshi co-founder Luana Lopes Lara said in a recent podcast interview that their goal is to become a general purpose exchange and the world’s largest derivative exchange. Traders can apply leverage to their positions in perpetuals.

• TD Cowen analysts say the CFTC’s decision to approve them for Kalshi creates more competition in the retail market and could weigh on multiples for exchange stocks. CME’s stock is down roughly 11% since last Friday’s approval, and Cboe Global Markets is down 20%.

• CFTC Chair Mike Selig wrote last week that the commodity markets regulator is working on a framework for true crypto asset perpetual contracts. Kalshi has already filed with the CFTC to certify perpetual futures tied to cryptocurrencies beyond Bitcoin. 

What’s Next: Benjamin Schiffrin, director of securities policy for Better Markets, a consumer-focused advocacy group, cautioned that there are risks for investors. “Perpetual futures facilitate continuous speculation and potentially overtrading, rapid losses and financial harm.”

—Nick Devor and Janet H. Cho

There are a half dozen initial public offerings this week where the companies are seeking valuations of $1 billion or more, getting out of the gate before next week’s giant SpaceX offering, which could detail its pricing today, according to The Wall Street Journal, which reported the SpaceX valuation could reach $1.75 trillion.

• The biggest debut of this week is Innio, a maker of gas engines that sells equipment to AI data centers. It is looking to sell 75 million shares at up to $27 a share. At the midpoint, Innio would raise $1.9 billion and be valued at a little more than $19 billion.

• Quantum computer company Quantinuum, majority-owned by aerospace leader Honeywell, aims to go public at a more than $10 billion valuation, and is hoping to cash in on the current bull market for all things quantum. Quantinuum will sell 26.5 million shares at $53 to $55. 

• The four other IPOs lined up this week are less buzzy, but they all combine as an important test. IPO activity has slowed so far this year, with the number of new stocks tumbling 22% from this time a year ago, according to Renaissance Capital. 

• But Renaissance says this year’s crop of debuts has raised $28.8 billion, up 144% from last year’s levels. Once SpaceX comes out—which is expected sometime next week—the AI developer Anthropic may not be far behind. It confidentially filed its paperwork already.

What’s Next: Elon Musk’s commercial space company may sell under 5% of its shares, the Journal reported, which is smaller than a typical IPO. The numbers, including a targeted share price, are expected to be filed later today, the report said.

—Paul R. La Monica and Janet H. Cho

Space stocks have been in hot demand ahead of that massive SpaceX debut, but for the space company founded by Elon Musk’s billionaire rival Richard Branson, not so much. Virgin Galactic had its worst trading day ever on Tuesday after it announced a stock sale to pay down debt.

• Redeeming the roughly $10 million in first-lien notes due in 2027 at current stock prices means issuing some two million shares, or about 2% of total shares outstanding. That represents significant dilution for shareholders.

• Virgin Galactic still has about $20 million in notes outstanding, paying annual interest of 9.8%. Completing repayment of the 2027 notes means no further principal payments will be required until March 2028.

• The company ended the first quarter with about $250 million in cash, restricted cash, and marketable securities on its balance sheet. Wall Street sees the company using about $220 million in cash in the second, third, and fourth quarters combined.

• Virgin Galactic is acting opportunistically. Coming into Tuesday trading, shares were on a seven-day winning streak, sending them up 204%. Even with Tuesday’s drop, shares have still risen about 50% year to date. It did a 1-for-20 reverse stock split in 2024.

What’s Next: Space tourism just hasn’t developed as quickly as Virgin Galactic or its early investors had expected. The company still expects to start commercial space tourism operations in the fourth quarter of 2026.

—Al Root