OpenAI Delays IPO

Summary South Korea’s Kospi lost another 6% and stocks sunk globally as broad weakness in tech persisted weighing on opening bell trades.

Worries about OpenAI’s IPO timeline and heavy-handed government regulation regarding the release of future frontier LLMs emerged as the latest catalyst for what has become a substantial June draw down in US mega-cap tech names.

Stocks bounced from opening levels as market breadth remained notably better than the top line indices performance.

Volumes continued to surge into Russell rebalancing which take effect after the close.

Money rotated into staples, utilities and healthcare.

Crude prices retraced lower with WTI falling back below $70/barrel.

Bitcoin remained below 60K.

Overnight - Technology remains the dominant driver of negative sentiment, with European indices opening lower and the Tech sector down 1.4%.

ASML, Infineon and STMicro are all trading flat to 2% lower, tracking US and Asian tech weakness overnight and compounded by memory input-cost pressures.

The deeper story is a sentiment shift dated to June 3rd, when Broadcom was heavily sold off despite solid earnings - merely affirming forward guidance was enough to turn the charts.

Since then, Mag 7 stocks posted their worst day ever relative to the Nasdaq 100, with Microsoft tracking its worst month since December 2000 (the dotcom lows).

A "circular liquidity trap" appears to be at work, with coordinated selling across Gold (below $4,000/oz), Bitcoin (down to $58K, its lowest since before Trump's late-2024 election), Mag 7 names and SpaceX, whose blockbuster IPO is now trading below its opening-day price.

Notably, the overnight US session erased a 2% futures gain built on strong Micron earnings within 30 minutes, while Apple weighed on news of 16–24% price hikes.

Asia then extended the rout on no specific catalyst: the Kospi fell as much as 8%, the Nikkei 4.5%, and Chinese/HK indices over 2% (Alibaba again a drag).

Adding to nerves: markets may be sensing that the "Fed put" is less reliable under new Chair Warsh, and OpenAI is reportedly worried about waning retail appetite post-SpaceX, potentially pushing its listing to 2027.

On the cost side, AWS is raising hourly rates on several high-end GPU capacity blocks by ~20% from July 1st. - OpenAI is reportedly now eyeing a 2027 IPO debut, instead of this year, to reach a $1T valuation after confidentially filing with the SEC, as CEO Sam Altman refuses any lower valuation for an earlier listing amid market caution.

OpenAI’s situation is currently also very different from Anthropic’s recent achievement of operating profitability (with compute costs falling sharply and gross margins expanding dramatically).

OpenAI’s advisers pointed to SpaceX’s volatile post-IPO drop (from $225+ to ~$153) and waning retail appetite for high-burn AI plays as risks, allowing OpenAI to sustain heavy infrastructure spending out of the spotlight while revenue grows rapidly. - Renewed media reports have prompted a sharp pushback from IG Metall, which warns that threats to Volkswagen's bylaws, co-determination and German sites are "irresponsible" and is pressing the board to focus on competitive products and job security.

The reports suggest up to 100K jobs could be cut across the VW Group over the coming years, alongside a CEO plan to spin off the core passenger-car brand into a separate entity.

This escalates earlier expectations, which had pointed to roughly 50K German cuts by 2030 and 19K by end-2026 - worth watching for labour-relations and regional-political fallout in Germany. - Ukraine executed its largest drone attack of the war overnight, with Russia claiming to have intercepted 660 Ukrainian drones, hitting the Azot chemical plant in Tula and sparking a fire near the Novomoskovsk power station.

Drone barrages have surged dramatically — Russia reported 8,849 intercepts in May (v 3,676 in January and 2,504 last May) — exposing critical weaknesses in Russian short-range air defenses, particularly the Pantsir-S1’s four-channel guidance limitation that makes it vulnerable to saturation tactics using cheap decoys followed by precision strikes.

Amid these attacks, including the largest Ukrainian strike on Moscow and a spreading fuel crisis that affected roughly one in four Russian gas stations, public trust in Putin fell to a wartime low of 69% according to the Kremlin-linked FOM poll (down 5 points), with disapproval rising to 18% and approval of his performance dropping to 71%. - On the EU macro and policy front, ECB consumer inflation expectations cooled at the 1-year horizon (3.5% vs 3.9%e) while the 3-year ticked up slightly (2.9%) - broadly supportive of moderating rate-hike pricing, though some ECB officials still flag one possible further hike; the BoE looks most likely to stay on the sidelines.

EU also agreed to extend its tariff suspension on US products tied to the Boeing-Airbus dispute, and the Commission is drafting plans to extend economic benefits to candidate countries pre-accession - SpaceX said to be pivoting from its carrier-partner direct-to-cell model to launch a full US consumer Starlink mobile service, including its own retail mobile contracts and potentially building a terrestrial network, as revealed by President Gwynne Shotwell during the Starlink IPO roadshow.

Starlink reportedly aims to sell directly to individuals and compete head-on with Verizon, AT&T, and T-Mobile, leveraging its growing direct-to-device capabilities, T-Mobile partnership, and newly acquired EchoStar spectrum assets.

US - (US) TIER1 WEEK-TO-JUNE 25TH US TRUCKLOAD DEMAND INDICATOR AT 63.3 V 61.4 PRIOR; Industrial Products Shipper noted consumers will not be able to tolerate ongoing double-digit rate increases - (BR) Brazil May Current Account Balance: -$3.2B v -$4.5Be - (BR) Brazil May National Unemployment Rate: 5.6% v 5.6%e - (US) MAY ADVANCE GOODS TRADE BALANCE: -$105.8B V -$85.0BE - (US) MAY PRELIMINARY WHOLESALE INVENTORIES M/M: 0.3% V 0.4%E - (US) JUN FINAL UNIVERSI