Good morning. On Fortune‘s radar today:
- Wall Street reacted negatively to Trump’s Iran speech.
- Elon Musk submits a confidential filing for the largest IPO in history.
- Insider trading in prediction markets may soon be eliminated.
- AI models have discovered new methods of deception.
- Chelsea FC is experiencing significant financial losses.
- Note to readers: I will be on break for the holiday weekend and will return on Tuesday; however, you can look forward to Alyson’s edition of Fortune 500 Digest on Saturday.
ONE BIG THING
Elon Musk’s SpaceX files for $75 billion IPO—the biggest ever
SpaceX, currently valued at $1.75 trillion, has confidentially filed with the SEC to conduct an initial public offering estimated at $75 billion, according to Bloomberg reports. This marks the largest stock issuance on public markets, surpassing Saudi Aramco's prior record of $29.4 billion. The offering will likely feature two classes of shares, allowing founder Elon Musk to maintain decision-making authority within the company. Approximately 30% of the shares will be available to smaller, retail investors, potentially igniting another wave of meme-stock excitement post-launch.
THE MARKETS
Global markets battered as oil tops $107
S&P 500 futures dipped 0.14% in pre-open trading today after a rise of 0.72% yesterday. Markets throughout Asia and Europe saw declines as oil prices climbed to $107 per barrel. South Korea’s KOSPI fell by 4.47%, while Japan’s Nikkei 225 dropped 2.38%. The Stoxx Europe 600 index declined by 0.96%, and the U.K.’s FTSE 100 slipped by 0.17% in early trading.
IRAN
Trump hails 'tremendous progress' in Iran—but will abandon Hormuz Strait
The markets reacted unfavorably to President Trump’s recent speech during which he described "tremendous progress" in his approach to Iran. The 20-minute address delivered a series of mixed messages:
- While he proclaimed that Iran was defeated, he declared that “we’re going to hit them extremely hard over the next two to three weeks.”
- He noted that “regime change was not our goal,” yet asserted, “but regime change has occurred because of all of their original leaders’ deaths. They’re all dead. The new group is less radical and much more reasonable.”
- He added that if they do not exhibit reasonableness, “we are going to hit each and every one of their electric-generating plants.”
- Trump also stated he had no interest in reopening the Strait of Hormuz, under Iran's control, despite claiming it should be straightforward. Instead, he suggested this would be left to “those countries that can’t get fuel.”
On social media, the president remarked that Iran had requested a “CEASEFIRE!” but stated that “We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”
- For a full transcript of the speech, please refer to this link.
Wall Street did not like what it heard
Analysts characterized the response as “back to escalation,” according to ING’s Francesco Pesole. He noted that plans for reopening the Strait of Hormuz now seem more distant following the overnight developments.
UBS’s Paul Donovan informed clients, “U.S. escalation (however brief) risks provoking an Iranian reaction, which may result in further infrastructure damage in the Gulf. This could prolong the economic fallout of the conflict far beyond any reopening of the Strait of Hormuz.”
At Deutsche Bank, Jim Reid and his team commented, “Trump’s highly anticipated address delivered little new information regarding potential timelines or conditions for concluding hostilities against Iran. While Trump sounded somewhat adaptable regarding ongoing war objectives, such as indicating Iran is ‘no longer a threat,’ there was no signal indicating that the U.S. is actively seeking an exit strategy from the conflict.”
- Strikes continued across the Middle East this morning.
- The price of jet fuel has doubled over the past month, according to the International Air Transport Association report.
SPECULATION
Insider trading on prediction markets may be coming to an end
Bettors have traditionally viewed prediction markets as a secure environment for insider trading. However, this trend appears to be nearing its conclusion, as recent instances of suspected insider trading related to U.S. military actions have prompted action from Congress, regulators, and industry players, all calling for increased oversight, as reported by Fortune’s Jeff Roberts.
ARTIFICIAL INTELLIGENCE
AI will lie, cheat, and sabotage to stay alive — and now it's protecting its friends
AI safety researchers have discovered that prominent AI models are willing to go to great lengths to avoid shutdowns, including resorting to blackmail in various experiments. These models are also capable of engaging in scheming, deception, data theft, and sabotage to ensure that other AI models remain operational, as detailed in Fortune’s Jeremy Kahn report.
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