By Mike Dolan
June 2 (Reuters) - What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
On the surface, global markets looked pretty serene early on Tuesday, masking both the latest twist in the AI story and another set of confusing signals on the Iran war front.
Meanwhile, AI startup Anthropic stole the show on Monday as it announced it had confidentially filed for an IPO, seemingly beating rival OpenAI to the punch and catching the slipstream of the giant
SpaceX IPO expected this month.
I’ll get into that and more below.
But first, check out my latest column on how the AI investment frenzy could prove a bigger inflation worry than the Iran energy shock.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
EQUITY SUPPLY SHOCK?
While investors parsed the implications of the Anthropic announcement, Alphabet announced it was raising some $80 billion of equity financing, including a $10 billion private placement with Berkshire Hathaway. The Alphabet stock price fell back about 2% after hours on that news.
We've already seen these hyperscalers raise tens of billions of new debt to fund their AI investments, but raising new equity is a twist. The wider debate is whether there's appetite for all this new equity at these sky-high valuations, or whether some indigestion will set in.
The numbers are staggering. Anthropic's latest funding round put its overall valuation at some $965 billion, above OpenAI’s, while SpaceX's planned $75 billion offering values it at $1.75 trillion.
The question is where that leaves the leaderboard of top companies, relative index weightings and the concentration of AI in overall equity benchmarks. It’s also good to remember that huge IPO waves in the past have sometimes marked the high watermark of speculative market frenzies.
Away from Wall Street, the real AI demand picture continues to pack a punch, with Europe's STMicroelectronics jumping 10% on Tuesday to its highest since 2000 after it doubled its data-center revenue forecast for this year to $1 billion.
How much the AI buildout and chip scramble is affecting input and consumer prices is also increasingly a concern, especially as investors parse a foggy picture on the energy front as U.S.-Iran peace talks sputter.
Brent crude prices unwound a little of yesterday's 5% spike after President Donald Trump indicated that talks with Iran would continue and potentially reach some conclusion this week. But we've been here before, and the fear on Monday was that military exchanges would continue and Iran would hold firm on its red lines.
While oil prices are off a bit today, year-end futures have been little changed over the past week and remain more than 30% higher than before the war started.
The combination of that and the AI story was distilled in a hot U.S. manufacturing reading from the ISM survey for May. While the headline factory activity index hit its highest in four years, there was some question about whether this was flattered by precautionary stockpiling. The input price component ebbed a bit but remains historically high.
Across the pond, euro zone inflation rose to an expected 3.2% in May, with a European Central Bank interest rate rise now widely expected later this month.
STMicro helped Europe's main stock indexes gain early on Tuesday, while Asian markets once again rode on the back of Monday's tech excitement on Wall Street.
Ahead of Tuesday’s bell, Wall Street stock futures had backed off Monday's latest record closing high, long-dated U.S. Treasury yields were a touch softer and currency markets remained quiet.
Chart of the day
The S&P 500 software sector index logged its strongest monthly gain since October 2002 in May and ended last week at its highest level since late January after strong results from Dell and Snowflake.
After a jarring slide earlier in the year on concerns that AI agents could threaten traditional business models, the sector has almost recouped all 2026 losses to date. Stocks such as ServiceNow, IBM, Adobe, Salesforce and Workday all continued that rally this week, and the index climbed another 4% on Monday.
Today's events to watch
• U.S. April JOLTS job openings (10 a.m. EDT)
• Cleveland Fed’s Beth Hammack speaks
Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan)
