Wall Street plunges on inflation fears ahead of SpaceX's 1.75 trillion IPO

Wall Street braced for a historic week as US tech stocks plummeted on Wednesday, erasing billions in market value ahead of SpaceX’s blockbuster initial public offering (IPO) on Friday. The Nasdaq Composite shed 509 points, or 2.1%, in a global rout driven by surging inflation and geopolitical tensions, while the Dow Jones Industrial Average plunged 953 points, or 2.3%, as the latest consumer price index (CPI) data stoked fears of prolonged monetary tightening. Analysts at Reuters noted that markets were “walking a tightrope between AI stocks and oil shocks,” with energy prices surging since the escalation of the Iran war pushing US inflation to its highest level in three years .

The sell-off deepened as investors grappled with conflicting signals: President Donald Trump hailed the inflation data as “great” , while Federal Reserve officials privately warned of the risks of premature rate cuts. The volatility comes just days before SpaceX’s IPO, which is expected to value the company at $1.75 trillion and could make Elon Musk the world’s first trillionaire. Investment banks, including Morgan Stanley and Goldman Sachs, are reportedly preparing for the largest market debut in history, with underwriters already celebrating the milestone .

Yet the euphoria is tempered by caution. Dutch daily *NRC* highlighted the skepticism among investors, who question whether SpaceX can meet its towering expectations amid rising costs and regulatory hurdles. “Who dares?” the paper asked, pointing to the company’s reliance on satellite launches and Starlink’s profitability amid fierce competition . Analysts at Reuters’ Breakingviews warned that the IPO could set the “altitude” for future tech listings, with SpaceX’s valuation serving as a benchmark for AI-driven growth stocks .

The broader market rout extended beyond the US, with global equities reeling from the dual pressures of inflation and geopolitical instability. The Nasdaq’s decline mirrored losses in European and Asian markets, where energy-intensive sectors bore the brunt of the sell-off. In London, the FTSE 100 dropped 1.8%, while Tokyo’s Nikkei 225 fell 2.4% as investors priced in the likelihood of higher-for-longer interest rates. The CPI spike, driven by a 12% jump in gasoline prices since the Iran conflict began, has upended earlier hopes of a soft landing for the US economy .

As Wall Street counts down to Friday’s debut, the question is whether SpaceX’s IPO can break the cycle of volatility—or whether it will become another casualty of the market’s current fragility. For now, the message from traders is clear: caution is the order of the day.