Morning Wrap: ASX 200 to rise, Dow hits record as Broadcom rocks the AI trade

In a nutshell:

• Dow surged 1.7% to a record close as investors rotated out of AI names, S&P 500 rose 0.4%, Nasdaq closed flat after Broadcom plunged 12%

• Brent fell 2.0% to US$95.35 after Israel and Lebanon agreed to a ceasefire, lifting hopes for a US-Iran deal and a Strait of Hormuz reopening

• SpaceX set terms for a record US$75bn IPO at a US$1.75tn valuation, with trading to begin June 12

Let's dive in.

• Major US benchmarks mostly higher, finished near best levels

• Dow rallied to fresh all-time highs amid a notable pivot from tech/semis/memory to defensive pockets of the market like healthcare, financials, telcos and real estate

• Russell 2000 closed exactly 1 pt off a fresh record high, though outperformed the S&P 500 and Nasdaq by a wide margin

• A fairly quiet session with no new major catalysts or market themes, US-Iran remains a deadlock though Trump said he does not want to restart attacks, while Israel and Lebanon agreed to a (very fragile) ceasefire, this drove Brent 2% lower overnight

• Broadcom's 12% slide sparked the rotation away from AI-linked stocks, with UnitedHealth, JPMorgan, Costco and Eli Lilly leading non-tech gains (CNBC) 

• Bitcoin fell ~1% to US$64,000, now down 14% in the last five sessions as investors turned risk-off, erasing all gains made since the start of the Iran war (YF)

• Israel and Lebanon agreed to implement a ceasefire, boosting hopes for a broader deal to end the US-Israeli war with Iran (CNBC)

• Fighting persisted in Lebanon despite the truce, which is conditional on Hezbollah halting hostilities, while Iran said there had been no recent progress in US talks (BBG)

• US House passed a war powers resolution 215 to 208 directing Trump to end the Iran war, with four Republicans joining Democrats in the first such passage since the conflict began (NPR)

• Trump attacked the vote on Truth Social, calling it meaningless and blasting "4 bad Republicans" for acting during his final negotiations with Iran (CNN)

• Trump said the Strait of Hormuz would reopen "immediately" if Iran signs a memorandum of understanding, adding some areas would need mine clearing (BBG)

• Westpac says Brent could climb to US$130 in the fourth quarter as inventories tighten, warning "the market is asleep at the wheel" (BBG)

• Oil industry execs told the White House waning inventory buffers may mean global energy prices could surge in weeks (POL)

• SpaceX set IPO terms to sell 555.6m shares at US$135 each, raising US$75bn at a US$1.75tn valuation, the largest IPO in history, trading begins June 12 under ticker SPCX (YF)

• SpaceX lead IPO investment bank Goldman Sachs says it expects company's AI revenues to surge 100x by 2030 to $322B (FT)

• Broadcom Q2 FY26 revenue up 48% to US$22.19bn, narrowly below consensus, AI revenue up 143% to US$10.8bn, reiterated rather than raised FY27 AI target above US$100bn, shares down 12.5% (YF)

• CrowdStrike Q1 FY27 revenue up 26% to US$1.39bn, around 2% ahead of consensus, EPS US$1.10 beat estimates, shares down 3.8% on soft guidance (BBG)

• UnitedHealth rose more than 5% to lead the Dow, JPMorgan added 3% and Eli Lilly gained more than 4% in the rotation to non-tech names (CNBC)

• Databricks to delay IPO beyond 2026 given flurry of offerings this year (BBG)

• Liftoff Mobile rallies ~23% on its IPO, three months after withdrawing a previous registration (BBG)

• Quantinuum shares close flat at $60.38, fractionally above $60 IPO price despite demand being 20-times oversubscribed (BBG)

• USTR proposed tariffs of up to 12.5% on imports from 60 economies over failure to ban forced-labor goods, with 10% for partial-prohibition economies and 12.5% for the rest, including China, the EU and Japan (CNBC)

• New levies part of Trump's push to replace revenue lost after the Supreme Court struck down his IEEPA tariffs, with stopgap 10% global duties expiring July 24 (PBS)

• US initial jobless claims rose to 225,000 against forecasts of 214,000, up from 212,000 the prior week (IVST)

• May nonfarm payrolls due tonight, consensus around 85,000 jobs versus 115,000 in April, which would mark a third straight month of gains (SWB)

• Eurozone retail sales fell 0.4% month-on-month in April, worse than the expected 0.3% decline, after a 0.8% rise in March (WSJ)

• BHP secures dual-rail transport agreements with CN and CPKC for Jansen, to move potash from Saskatchewan to Vancouver export terminals (BHP)

• Civmec reports record $1.5bn orderbook, expected to be delivered across FY27-28 (CVL)

• Lynas appoints COO Pol Le Roux as interim CEO, effective 1-Jul as current CEO Amanda Lacaze is due to retire at the end of FY26 (LYC)

• Monadelphous Group awarded major contract with CS Energy, contract valued at $380m (MND)

• Qantas discussing potential purchase of ~20 jets with Boeing or Airbus (RT)

• Big defensive shift: Haven't seen S&P 500 sectors like Healthcare, Financials, Telcos and Real Estate all rally more than 2% in a long time. Megacap names all positive outside Broadcom and Tesla, though Micron (-7.7%), AMD (-3.5%), Sandisk (-3.9%) and Qualcom (-2.9%) notably lower. Will be interesting if this is a lasting shift into value/defensives or a momentary pullback for high-flying AI names.

• Commodities mixed: The local Materials sector tumbled 3.1% on Thursday, amid a broad pullback in commodity prices. A mixed bounce overnight, with gold up 0.95% and copper up 0.7% but continued softness for aluminium, nickel and palladium.

• Treasury Wine Estates upgraded to Buy from Neutral; target up to $5.50 from $4.25 (Citi)

Stocks trading ex-dividend: 

• Fri 5 Jun: Whitefield Industrials (WHF) – $0.105

• Mon 8 Jun: None

• Tue 9 Jun: Infratil (IFT) – $0.095, Whitefield Income (WHI) – $0.006

• Wed 10 Jun: Tower (TWR) – $0.041, WCM Global Growth (WQG) – $0.022

Other ASX corporate actions today:       

• Dividends paid: Alcoa (AAI), Tamawood (TWD), United Overseas Australia (UOS) 

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 8:30 pm: India GDP Growth

• 10:30 pm: Canada Unemployment

• 10:30 pm: US Nonfarm Payrolls