US June Payrolls Take Center Stage After S&P 500 Falls 2.0%

Q: Is OpenAI's IPO delay the first crack in the AI valuation bubble or a masterstroke in a volatile market?

It looks more like a tactical delay than the definitive bursting of an AI bubble, though it does expose how stretched AI valuations have become. The immediate backdrop matters. US tech just suffered a sharp rotation, the Nasdaq 100 fell 4.2% last week, and investors are repricing rates higher for 2026. In that environment, a blockbuster AI IPO would face tougher scrutiny on valuation, losses and cash burn. Reports that OpenAI may wait until 2027, after a confidential filing, fit that logic: avoid listing into a volatile market that has already punished richly valued growth names and recent tech debuts. But the delay is also a warning sign. OpenAI is reportedly targeting a valuation near $1 trillion while still posting very large losses and requiring enormous ongoing spending on chips, data centers and research. That gap between private-market ambition and public-market tolerance is exactly where bubbles start to show stress. The broader sector has the same issue: huge capital expenditure, uncertain returns, and growing investor concern that AI revenue growth is arriving faster than durable profits. So the delay is best read as both a defensive move and a reality check. It is not, by itself, proof that the AI trade is breaking. Yet it suggests public investors may no longer accept private-market pricing on faith alone. The real test will be whether OpenAI and peers can show clearer paths to cash flow before they ask public markets to fund trillion-dollar valuations.

3 articles · Updated · IG International · Jun 29

Thursday’s US June non-farm payrolls report is the week’s key market event, with investors watching whether another strong reading revives fears of further Fed tightening.
May payrolls rose 172,000 against an 85,000 consensus, and upward revisions lifted the three-month average to 188,000 — the strongest since March 2024.
That backdrop already hit rate-sensitive tech: the S&P 500 fell 2.0% last week and the Nasdaq 100 dropped 4.2% as half-year rebalancing and AI valuation worries drove money into cyclicals and defensives.
Gold briefly slipped below $4,000 before ending at $4,072 an ounce, pressured by markets shifting from pricing two to three Fed cuts this year to nearly one full hike.
The week’s broader policy test extends to Sintra, where Fed Chair Kevin Warsh and ECB President Christine Lagarde speak, and to China’s June PMI data for signs of stagnating growth and margin pressure.