Oracle Falls 9% on a $95B AI Capex Plan as PPI Hits 6.5%. The ECB Hikes and SpaceX Prices Its IPO at $135.

Thursday pre-PPI, 7:30 AM ET. Overnight action is defined by two forces pulling markets in opposite directions: a semiconductor rebound led by Intel and Applied Materials is lifting Nasdaq futures over 1%, while Oracle’s post-earnings plunge and hotter-than-expected PPI data remind investors that the AI capex cycle comes with a cost, and the Hormuz-driven energy shock is still pushing through the pipeline. Futures are trading green on balance, with the S&P 500 up 0.71% and the Nasdaq up 1.17%, as the chip recovery outweighs the drag from Oracle and macro concerns. But the risk calendar is front-loaded today: May PPI lands at 8:30 AM, ECB rate decision at 12:15 PM, and SpaceX prices the largest IPO in history after the close.

Oracle reported fiscal Q4 2026 results that beat on every metric, yet the stock is down 9.4% in pre-market to $184. Revenue came in at $19.2 billion (up 21% year-over-year), beating estimates of $19.1 billion. Non-GAAP EPS of $2.11 topped the $1.95 consensus by 8%. Cloud Infrastructure revenue surged 93% to $5.8 billion. The backlog grew to a record $638 billion from $553 billion in Q3, with $75 billion of the quarterly increase representing prepaid or customer-supplied AI hardware. All of this is objectively strong. What spooked the market is the funding side: Oracle spent $55.7 billion in capex for FY2026, above the $50.9 billion estimate, and guided for another $40 billion in debt and equity financing in FY2027 to sustain the buildout, including the previously announced $20 billion at-the-market equity offering. The Stargate data center in Texas, built with OpenAI, will be more than three-quarters complete within 90 days. This is the market telling Oracle (and by extension the entire hyperscaler complex) that it believes in the demand story but is deeply uncomfortable with the balance sheet trajectory required to fulfill it.

Our Take: Oracle is executing, and the $638 billion backlog is real contracted demand, not vapor. But the market is repricing the equity cost of that execution. At $55.7 billion in annual capex and $40 billion in planned financing, Oracle is becoming a capex story first and an earnings story second. The bull case requires faith that the backlog converts to revenue and eventually free cash flow at scale; the bear case is that the financing dilutes shareholders before the payoff arrives. The read-through to NVDA, AVGO, and the broader AI supply chain is actually positive for component demand but negative for the “when does this cycle generate returns” question.

May PPI, released at 8:30 AM, came in significantly hotter than expected. The Producer Price Index for final demand rose 1.1% month-over-month versus the 0.7% consensus, driven almost entirely by a 2.8% surge in final demand goods (read: energy). Year-over-year PPI hit 6.5%, the highest since November 2022. Core PPI (excluding food and energy) rose 0.4%, actually below the 0.5% consensus, mirroring yesterday’s CPI pattern where the headline screamed inflation but the core suggested the problem remains concentrated in energy. This is important for the Fed: two consecutive data points now show that underlying price pressures are contained while the headline numbers are distorted by the Hormuz-driven oil shock. The question is whether Warsh’s Fed interprets this as “look through it” or “headline is what consumers feel, act on it.” Treasury yields are rising on the hot headline, with the 10-year at 4.54% (+4 bp).

The ECB rate decision at 12:15 PM ET is widely expected to deliver a 25 basis point hike to 2.25%, the first tightening since September 2023. Lagarde faces the same dilemma as the Fed but with less political insulation: euro area inflation has re-accelerated to 3.2% on energy, while core remains closer to target. The press conference at 12:45 PM will be the more important event. Markets want to know if this is a one-and-done hawkish signal or the start of a tightening cycle.

The semiconductor complex is staging a relief rally after last week’s sharp selloff. Intel is up 4.8% in pre-market after Bank of America upgraded the stock to Buy from Underperform with a price target raised to $135 from $96, citing the Alphabet AI chip contract and improved foundry outlook. Applied Materials and Lam Research are both up 4.6%. Micron is gaining 3% on sector-wide optimism ahead of its June 24 earnings. The chip rebound is notable because it is broadening: rather than just NVDA leading, the second-tier names (INTC, AMAT, LRCX) are catching bids, suggesting institutional rotation into AI infrastructure at lower entry points after the June 5 rout that wiped $1 trillion from semiconductor market caps.

SpaceX prices the largest IPO in history tonight at $135 per share, raising $75 billion at a $1.75 trillion valuation. Trading begins tomorrow on Nasdaq under ticker SPCX. Investor demand exceeded $250 billion, and retail allocation is targeted at 30%, far above the typical 5-10%. Goldman Sachs leads the syndicate. This is not just a market event, it is a structural shift: SpaceX becomes the seventh-largest US company by market cap, above Tesla, and adds a pure-play space and defense name to public equity indices. The read-through to Tesla is mixed. Belgium approved Tesla’s Full Self-Driving software yesterday, making it the 13th country globally, and FSD subscriptions are at 1.28 million active users, up 51% year-over-year. But SpaceX’s debut may redirect some of the Musk premium away from TSLA.

The US-Iran conflict remains the dominant macro overhang. The US launched a second day of strikes on Iranian military surveillance, communications, and air defense sites. Iran retaliated with missile strikes targeting US bases in Jordan, Bahrain, and Kuwait. Jordan intercepted 20 Iranian missiles; an 11-year-old girl was injured in Bahrain. Three Indian mariners were killed when the US struck an oil tanker allegedly violating the US blockade of Iran. Tehran declared the Strait of Hormuz closed to all marine traffic. Despite the headline escalation, oil prices actually eased overnight: Brent fell 1.4% to $91.80 and WTI dropped 0.8% to $89.10. The market is reading the repeated exchanges as performative posturing rather than a path to broader war, and both sides appear to be looking for an off-ramp. Qatari mediators continue shuttle diplomacy between Washington and Tehran.

Gold dropped to $4,094, its lowest opening since November 2025, an initially counter-intuitive move during active military hostilities. The sell-off reflects rising Treasury yields on the hot PPI print, profit-taking after gold’s extended run above $4,300, and a market consensus forming that the conflict will not escalate into a broader regional war. If that consensus proves wrong, gold snaps back violently. Bitcoin reversed sharply to $63,074, up 3.8% from yesterday’s 19-month low, benefiting from a risk-on tone and institutional buying on the dip.

Asian markets sold off heavily. The Nikkei 225 slumped 3.1% to 62,210, a sharp move driven by the Iran re-escalation, yen strength, and continued fallout from the semiconductor rout. Japanese exporters were hit particularly hard as the yen strengthened past 148 on safe-haven flows. The Hang Seng fell 0.4% to 24,566, extending losses for a fifth straight session to its lowest since late March. The CSI 300 declined 1.4% to 4,802 as China’s stimulus optimism faded and the broader risk-off environment weighed on sentiment. In Europe, the DAX dropped 1.0% to 24,195, though the Stoxx 600 managed a modest 0.3% gain as energy stocks provided a partial offset.

Key Events Today

Pre-Market Movers

Geopolitical Tracker

US-Iran: The US concluded its second round of strikes overnight, targeting Iranian military surveillance, communications systems, and air defense sites. CENTCOM framed these as proportional responses. Iran responded with missile strikes on US-adjacent bases in Jordan, Bahrain, and Kuwait. Three Indian mariners were killed when the US struck an oil tanker attempting to run the Iran blockade. Tehran declared the Strait of Hormuz closed to all marine traffic. Despite the rhetoric, both sides appear to be signaling through back-channels; Qatari mediators are in Tehran. Oil easing rather than spiking suggests the market reads this as escalation-for-negotiation rather than a path to total war.

Strait of Hormuz: Effectively closed since late February, blocking over 12 million bpd. Cumulative supply losses exceed 1 billion barrels. OPEC+ response remains symbolic at 188,000 bpd. The oil market has partially adjusted to the new reality, with non-Hormuz supply routes absorbing some demand and SPR releases providing marginal relief.

ECB/Europe: The rate hike today puts Europe on a divergent path from the Fed, which has held steady. Euro area inflation at 3.2% is lower than US 4.2%, but the ECB is more sensitive to energy prices given Europe’s greater import dependence. Watch for Lagarde’s language on whether this is a one-off or the beginning of a cycle.

This note reflects information available as of June 11, 2026, 7:30 AM ET. S&P 500 futures at 7,463 (+0.71%), Nasdaq 100 futures at 29,221 (+1.17%), Dow futures at 51,086 (+0.75%). Oracle Q4 beat top and bottom line but $95B in AI capex and $40B financing plan sent shares down 9.4%. May PPI came in hot at 6.5% YoY and 1.1% MoM, but core PPI below estimates at 0.4%. ECB expected to hike 25bp to 2.25% at 12:15 PM. SpaceX IPO prices tonight at $135 for a $75B raise. Chips rebounding with INTC +4.8%, AMAT +4.6%. US-Iran exchanged second day of strikes; Brent eased to $91.80. Gold at six-month low $4,094. Bitcoin +3.8% to $63,074. For internal use only. Not investment advice.