The Big Three

IPO’s are back

After several years of subdued activity, the global IPO market looks to be on the verge of a dramatic resurgence. Higher interest rates, weaker valuations and cautious investor sentiment caused many companies to delay public listings between 2022 and 2025. However, improving market conditions look to have revived the IPO market.

The three names attracting the greatest attention are SpaceX, OpenAI and Anthropic. Together, they are expected to raise roughly $170bn in fresh capital at valuations that could exceed $4tn combined, demonstrating the extraordinary scale of investor interest in artificial intelligence and space technology. 

SpaceX is scheduled to go public next week, while OpenAI and Anthropic have recently confidentially filed for IPOs. The move towards the stock market is almost guaranteed to generate enormous demand from institutional and retail investors alike, and if all three were to make successful stock market debuts this year, it could catalyse one of the most significant IPO waves in market history.

The implications extend far beyond these companies themselves. A successful wave of blockbuster IPOs would stimulate broader capital markets activity and signal renewed confidence in high-growth technology businesses. Strong demand for offerings of this magnitude would also suggest that investors remain willing to back ambitious, long-term growth stories despite ongoing uncertainty around the globe.

Higher-for-longer 2.0?

The market narrative has notably shifted over the past month as a series of stronger-than-expected economic releases has challenged expectations of imminent monetary easing, particularly in the United States.

The most significant release was the May US employment report, which showed payroll growth of 172,000 jobs, more than double consensus expectations. The unemployment rate remained low at 4.3%, while previous months’ data were revised upwards, reinforcing the picture of a resilient labour market.

As a result, investors have repriced the outlook for US monetary policy. Markets no longer expect the Fed to deliver any rate cuts this year and are instead pricing in one additional rate hike before year-end. This represents a significant shift from earlier expectations that the Fed would begin easing policy in response to slowing growth and moderating inflation. Attention is now turning to next week’s Federal Open Market Committee meeting, which will be the first policy meeting chaired by newly appointed Fed Chair Kevin Warsh.

This matters because almost every asset class has been priced around lower rates, eventually arriving - that assumption is being challenged. US 10-year Treasury yields have risen above 4.5%, and equity valuations are facing increased scrutiny in the lens of an extended period of higher rates.

No end in sight

US–Iran tensions remain the most significant geopolitical risk for global markets, with growing concern that no immediate end to the conflict appears in sight. Over the past month, brief periods of de-escalation have been followed by sparks of renewed military activity, while diplomatic efforts have made little progress. Continued proxy activity and security incidents around key shipping routes have reinforced fears of prolonged instability.

Oil remains the primary channel through which markets feel the impact. Brent crude has traded around the mid-$90s per barrel, reacting sharply to developments in the region. Although temporary easing in tensions has led to short-term price declines, the lack of a lasting political solution has maintained a geopolitical risk premium in energy markets. Key chokepoints, including the Strait of Hormuz, remain vulnerable, and even limited disruptions can significantly affect global supply and inventories.

While market reactions have been more restrained than during some past Middle East crises, the implications of a prolonged conflict are becoming increasingly important. Higher energy prices and ongoing supply concerns continue to support inflation expectations, complicating the outlook for central banks. For investors, this environment tends to favour energy and defence sectors, while cyclical industries and growth-focused assets remain exposed to higher inflation, elevated yields, and persistent geopolitical uncertainty.