Market story: Monetary policy, not rockets

Key takeaways

• The SpaceX IPO isn’t a macro signal. The float is too small to meaningfully distort liquidity or sentiment.
• The more consequential driver of markets remains policy, not rockets. Markets are more likely to fear central banks making the wrong move.
• The conditions that matter the most in my view still point toward a continuation of market performance rather than a reversal.

We’re going to the moon and Mars!

Markets entered last week with eyes fixed on the SpaceX initial public offering (IPO), but the feared “market disruption” never materialized. It was always an overstated fear to me. SpaceX floated only 4%–7% of its equity, raising roughly $75 billion against a valuation of nearly $1.8 trillion.¹ In a US stock market that typically trades between $500–$700 billion per day,² that’s more than a rounding error but not a market-disrupting event. Most SpaceX shares remain locked up with early investors, and the float is simply too small to meaningfully distort liquidity or sentiment.

Whether the valuation is justified is a debate for stock pickers and futurists. On current revenue, it seems aggressive. If the company succeeds in building low‑orbit data centers delivered by reusable rockets, perhaps it won’t look so stretched. But that’s a specific stock story, and not a macro signal. The SpaceX IPO is likely best understood as an idiosyncratic event, not evidence of broad market excess.

The real story: Policy, not rockets

The more consequential driver of markets remains policy. Markets are less likely to fear ambitious space companies, in my view, than central banks making the wrong move.

Three principles I still hold:

• Don’t fight the Fed.
• Volatility is often driven by policy uncertainty.
• The first rule of central banking is “do no harm.”

Against that backdrop, I don’t see the Federal Reserve (Fed) raising rates. The recent inflation uptick³ was predictable once gasoline prices jumped.⁴ What matters more are inflation expectations, and 3‑ and 5‑year breakevens declining to 2.40%,⁵ which signal that markets don’t anticipate runaway inflation.

Oil prices have been easing with the hopes of a Strait of Hormuz reopening.⁶ Even though we’ve been disappointed with negotiations with Iran before, that may be beside the point. With consumers already strained by elevated fuel costs, tightening policy into that pressure could be counterproductive.

The European Central Bank (ECB), however, faces a different challenge. A single‑mandate central bank may be forced to respond to inflation even when it’s driven by supply shocks that simultaneously weaken growth. Those dynamic risks can turn a temporary price spike into a policy error. I suspect the ECB will ultimately need to reverse course.

2026 is echoing 2025

The parallels between this year and last are increasingly hard to ignore.

• 2025: A fundamentally healthy backdrop disrupted by Liberation Day.
• 2026: A fundamentally healthy backdrop disrupted by a war in Iran.

In both cases, three things are the same. The underlying economic and earnings environment remained sound.⁷ A geopolitical or policy shock temporarily interrupted a broadening market.⁸ Once uncertainty eased, the advance resumed,⁹ accompanied by improved breadth within US indexes¹⁰ and sound global stock performance.¹¹

It feels like we may be following the same playbook.

Bottom line

I won’t say markets are “going to the moon” — that would be promissory. But I’ll say that I believe the conditions that matter the most still point toward a continuation of market performance rather than a reversal. The SpaceX IPO wasn’t the hurdle it was made out to be, in my view. I don’t see this as a market levitating on speculative fumes. The bigger stories are central banking, inflation expectations, and the gradual easing of geopolitical uncertainty.

And on those fronts, the path of least resistance could still look upward.

What to watch this week

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Originally Posted June 15, 2026

Market story: Monetary policy, not rockets by Invesco US

Footnotes

• 1Source: Bloomberg, L.P., June 12, 2026
• 2Source: Nasdaq Daily Market Summary, June 11, 2026
• 3Source: US Bureau of Labor Statistics, May 31, 2026, based on the Consumer Price Index.
• 4Source: American Automobile Association, June 11, 2026, based on the daily national average gasoline prices of regular unleaded.
• 5Source: Bloomberg, L.P., June 12, 2026, based on the 3- and 5-year US Treasury inflation breakeven. A breakeven inflation rate is a market-derived estimate of future inflation, calculated by comparing the yield on a standard government bond (nominal) to the yield on a Treasury Inflation-Protected Security (TIPS) of the same maturity.
• 6Source: Bloomberg, L.P., June 12, 2026, based on US West Texas Intermediate Crude Oil spot price.
• 7Sources: US Conference Board and Bloomberg, L.P., based on the Conference Board Leading Economic Indicators and the earnings per share growth of the companies in the S&P 500 Index.
• 8Source: Bloomberg, L.P., based on the outperformance of the S&P 500 Equal Weight Index vs. the S&P 500 Index over the first two months of 2025 and 2026.
• 9Source: Bloomberg, L.P., based on the price of the S&P 500 Index, which reached new highs on Dec, 24, 2025 and June 2, 2026.
• 10Source: Bloomberg, L.P., based on the Bloomberg Cumulative Advanced minus Decline Line for the S&P 500 Index. 
• 11Source: Bloomberg, L.P., based on the 6-month return of MSCI All Country World Index ex-US (+16.42%) and the S&P 500 Index (16.63%) ended Dec. 31, 2025.