Andrew here. Breaking: After Iran and Israel exchanged strikes, oil prices are up. And yet the stock market remains mostly positive. The juxtaposition is bewildering.
Another head-scratcher: Goldman Sachs and Morgan Stanley, the lead underwriters for SpaceX’s I.P.O., are reportedly promoting internal research by their analysts with particularly bullish forecasts for the company. For years after the dot-com crash, that was considered forbidden. Now, it’s not — but should it be? Read our report and let us know what you think.
Tighter reins
For much of President Trump’s second term, his administration’s approach to artificial intelligence has been to let the industry rip.
But amid personnel changes and potential new policies — including the federal government owning pieces of A.I. giants — Trump is signaling that he’s willing to take a more hands-on approach.
“We’ll look into that,” he told reporters on Friday about the prospect of A.I. companies giving taxpayers stakes in their firms. The comments came after a report by the publication NOTUS, citing unnamed sources, that Sam Altman of OpenAI had recently discussed such a plan. (Anthropic, which has filed for an I.P.O., reportedly isn’t currently engaging in such talks.)
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Such a move could be linked to the idea of universal basic capital, in which workers are given a share of the industry that may put many out of work. Returns on these investments could go toward a dividend payment to American households, NOTUS reported.
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It raises big questions, including how effectively the government could regulate companies it owns a stake in, and whether those A.I. giants would be more likely to get federal bailouts if they run into trouble.
That’s after Trump signed an executive order about A.I. oversight, in which tech giants would be asked to voluntarily give the government 30 days to review their newest models before releasing them to the public. (Trump had initially rejected a proposed 90-day review.)
And a top A.I. official is leaving the White House. Sriram Krishnan, a onetime Andreessen Horowitz partner who became the administration’s senior policy adviser for A.I., wrote on social media that he was stepping down.
Krishnan shared the pro-industry leanings of David Sacks, the former White House A.I. czar, having helped create the administration’s action plan that prioritized innovation over stricter safeguards for A.I. development. He was also involved in the White House seeking to limit states’ ability to regulate the technology.
What’s emerging is a White House more willing to regulate the industry, which it has essentially deemed a key national security priority. Consider how it has urged Anthropic to set tight limits on who can access Mythos, its next-generation model, amid concerns about its cyberwarfare abilities. (Anthropic only last week widened how many companies could use Mythos.)
Not everyone is thrilled with the administration’s shift:
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“I am fairly confident this is a mistake,” Dean Ball, a former White House A.I. adviser, wrote on X after Trump signed the executive order.
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And OpenAI called for civilian agencies to lead the government reviews of A.I. models. (Altman made the rounds in Washington last week.)
HERE’S WHAT’S HAPPENING
Oil prices rise amid military strikes in the Middle East. Brent crude, the international benchmark, rose to around $94 after Israel and Iran attacked each other, but then Tehran announced it would wind down military actions against Israel, for now. The business fallout of the war continues to mount, with airlines expected to spend an extra $100 billion for fuel this year, the International Air Transport Association said, and the sector’s profits expected to fall. And Axios reports that oil executives have begun to warn the Trump administration that $150-per-barrel oil could arrive in weeks if the war continues.
Prediction markets face criticism over ties to those pushing election conspiracy theories. Kalshi asked political influencers whom it has a commercial relationship with to take down social media posts promoting baseless election-fraud claims about the Los Angeles mayoral race, according to Semafor. Polymarket has contracted political influencers to get the word out about betting on their platforms, Politico reports.
A revamped Siri is set to take the stage. Apple is expected to unveil its overhauled digital assistant — now more chatbotlike and powered by Gemini, by Google — at its WWDC developer conference on Monday after years of failed efforts to update the tool. The release is expected to be the biggest test yet of Apple’s revised approach to A.I., a technology some executives worry could threaten the company’s business model.
Rates rout
War jitters are back, as are calls for higher interest rates. That has putting pressure on global stocks on Monday as investors sell shares in Asian companies tied to the artificial intelligence boom.
Markets face a few tests this week, highlighted by the Labor Department’s release of more inflation data as well as quarterly results from Oracle, the A.I. bellwether, on Wednesday, and SpaceX’s trading debut, expected on Friday.
The latest:
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U.S. futures are rebounding, but traders continue to sell bonds; the yield on the 10-year Treasury note rose to 4.54 percent on Monday.
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Asian chip stocks were battered on Monday, with shares in Samsung Electronics and SK Hynix falling heavily.
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The pullback follows Friday’s rout that saw U.S. tech stocks experience their worst one-day drop since April 2025, just after President Trump’s major tariffs barrage.
The volatility is leading to more questions about the A.I. trade and the Fed’s next move. The bond market is worried about higher borrowing costs, especially after Friday’s stellar jobs report. A resurgent labor market and rising wartime inflation could tie the central bank’s hand on interest rates, analysts say.
That could put pressure on Kevin Warsh, the new Fed chair. The central bank is expected to announce a rate decision next week, and already Trump, who had been pressuring Jay Powell, Warsh’s predecessor, to cut, is weighing in. He told the NBC News show “Meet the Press” that he didn’t “want to have a big influence” on Warsh, before adding: “There’s no reason to raise interest rates.”
The market sees it differently. Futures traders on Monday were pricing in a quarter-point interest rate increase by December, a call echoed by economists at BNP Paribas. Their counterparts at Goldman Sachs predict no interest rate cuts before June 2027, nixing their earlier call for a December reduction.
Could rates jitters spill over into the stock market? One area of concern is the A.I. rally, which has been bolstered by the tech giants’ debt-fueled spending spree. Investors have also grown concerned about tech valuations. Friday’s tech sell-off was a reminder “how little it takes for investors to take profits in A.I. trades,” Joachim Klement, the head of strategy at Panmure Liberum, an investment bank, told DealBook.
But, he added, “one snow goose doesn’t make an A.I. winter, so to say.” Sure enough, Nasdaq futures are gaining on Monday, as dip buyers appear to be back.
SpaceX.com?
Goldman Sachs and Morgan Stanley are set to reap huge fees as the lead underwriters for the potentially record-breaking I.P.O. of Elon Musk’s SpaceX. The banks also project some eye-popping growth forecasts — up to trillions in future revenues — for SpaceX.
The optimistic forecasts come after a recent easing of the rules governing banks that some market watchers fear will weaken protections for investors, Niko Gallogly reports.
Betting big on Musk: Goldman’s analysts forecat that SpaceX’s revenue will grow to more than $470 billion in 2030, over 25 times as much as what it generated in 2025. Morgan Stanley’s analysts project that the company’s revenue could hit $3.4 trillion in 2040.
Underlying those sky-high predictions is a belief in Musk’s artificial intelligence business, which has been aggressively racking up customers to rent its computing power:
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Last week, Google struck a deal to pay $920 million a month for computing power for nearly three years, delivering some $30 billion to SpaceX.
Goldman’s projections were shared verbally in a private meeting with one potential investor, The Financial Times reported. The forecasts from Morgan Stanley’s research team were shared by the banking team with select investors, according to The Wall Street Journal.
(Goldman declined to comment to DealBook, and Morgan Stanley did not respond to a request for comment.)
To some, it feels reminiscent of the dot-com era, when Wall Street analysts publicly hyped internet stocks. In 2003, major banks settled an investigation with Eliot Spitzer, then New York’s attorney general, over whether deal makers had improperly pressured research analysts to give favorable ratings to their clients.
They agreed to create firewalls between their investment banking and research divisions.
The rules changed last year. In December, the S.E.C. loosened those restrictions. That was after appeals by large banks arguing that newer regulations — notably Rule 2241 by the Financial Industry Regulatory Authority, the industry’s self-regulating group, adopted in 2015 — covered conflicts of interest.
“It is a whole new world,” Patrick Corrigan, a law professor at the University of Notre Dame, told DealBook. The new rules appear to allow underwriters to use their banks’ research to sell investors on an I.P.O., as long as they comply with rules meant to ensure the impartiality and objectivity of the research, Corrigan said.
The risk, Corrigan said, was that deal teams become a “conduit for an analyst recommendation that is subtly biased.” Skeptics of the new status quo are especially worried about retail investors, who are expected to buy up to 30 percent of the shares sold in SpaceX’s I.P.O.
Garden party
Knicks fever is gripping New York City before the N.B.A. finals game tonight, the first at Madison Square Garden in 27 years. Ticket prices are booming, and President Trump and Mayor Zohran Mamdani are expected to join the usual celebrities and Wall Street titans at the game.
DealBook checked StubHub, the ticket resale platform, on Monday, and found a pair of courtside seats, near the V.I.P. section, going for $160,546 each — a bit outside our budget.
With the World Cup kicking off later this week in North America, expect more talk (and complaints) about ticket-flation this summer as huge demand and dynamic pricing algorithms drive up prices for major sports events.
THE SPEED READ
Deals
Politics, policy and regulation
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Kathy Ruemmler is staying on as an adviser to Goldman Sachs at the behest of David Solomon, the firm’s C.E.O., after she resigned as the bank’s general counsel over revelations about her ties to Jeffrey Epstein. (Bloomberg)
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“Trump’s next G.O.P. loyalty test: Ending the changing of the clocks” (Politico)
Best of the rest
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