June 12 (Reuters) - U.S. stock index futures rose on Friday, buoyed by expectations for an imminent end to the Middle East conflict, while investors geared up for the market debut of Elon Musk's SpaceX, which is estimated to be Wall Street's biggest public listing in history.
U.S. President Donald Trump's comments on Thursday, which suggested that a deal to end the Middle East conflict and reopen the crucial Strait of Hormuz could be signed as early as this weekend, lifted sentiment globally, even
as Tehran said that a final decision was pending.
SpaceX is expected to start trading on the Nasdaq for the first time later in the day and is likely to be immediately ranked as the seventh biggest publicly listed U.S. company, with a potential valuation of $1.75 trillion.
The conglomerate, which also includes Starlink and xAI, has already defied some Wall Street conventions. Index providers such as Nasdaq and FTSE Russell have tweaked their entry requirements for its inclusion, while the company also set its stock price at $135, reflecting Musk's sway over the IPO.
Only about 3%-4% of SpaceX's shares are expected to be available for trading, and with the company listed on only one of the three main U.S. indexes, it could add to market volatility.
Some analysts have also voiced caution over its fundamentals.
"As things stand today, investors are essentially buying a company whose core business is launching satellites, which remains its largest source of revenue," said Ismael Garcia Puente, deputy director of investment strategy at MAPFRE AM.
"Its technology and AI-related businesses are still operating at a loss. We need to see how these segments evolve before we can assess their long-term profitability."
SpaceX posted over $4 billion in annual losses last year.
Shares of other space stocks have soared this quarter in the lead-up to the debut and were also up in premarket trading on Friday.
Rocket Lab added 7%, Intuitive Machines rose 7% and Planet Labs added 3.7%, while funds holding shares of SpaceX such as Fundrise Innovation Fund rose 6.6%, while Destiny Tech100 soared 11.4%.
At 05:55 a.m. ET, Dow E-minis were up 439 points, or 0.86%, S&P 500 E-minis were up 49.5 points, or 0.67%. Nasdaq 100 E-minis were up 190.5 points, or 0.64%.
The three main U.S. stock indexes are set for a muted end to the week, much of which was marked by uncertainty surrounding the Iran conflict and concerns that a rally in AI stocks has gone too far.
The S&P 500 is down nearly 3% from its last record high, and earlier this week the technology index confirmed a correction. Several analysts suggested that some of the weakness in U.S. stocks and bitcoin could be due to traders trimming holdings ahead of SpaceX's debut.
Data earlier this week also suggested that inflation pressures were mounting, driven by elevated energy costs stemming from the Mideast conflict.
However, since Trump's remarks in the previous session, oil prices have slid below $90 a barrel and traders have pushed their expectations for an interest rate hike by the Federal Reserve to December from October earlier this week, the CME Group's FedWatch tool showed.
Airlines such as Alaska and Delta rose over 1% each on lower energy prices.
Adobe slid 5.2% after the exit of CFO Dan Durn.
(Reporting by Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli)
