But the dip buyers are never far away. The S&P 500 started the day in negative territory, only to finish with gains. Lower oil prices on fresh ceasefire news — announced by the US — pulled crude prices lower. US crude retreated more than 3.5% to below the $93pb mark. Funnily enough, the ceasefire agreement announced by the US between Israel and Hezbollah was later rejected by Hezbollah. Yet oil prices remained low and risk appetite was relatively unaffected.

This morning, the moodiness is back in Asia. Oil prices are only slightly higher, yet Middle East uncertainties remain broad enough to keep risks tilted to the upside.

Korea's Kospi has extended losses to 5% in the session at the time of writing, while the Nikkei is down more than 1.72%. European and US futures point to a lower start as well.

We are starting to sense growing interest in profit-taking after a decent rally since April. A correction would be healthy for many tech-heavy stock indices at this point. Yet dip-buying pressure remains so intense that dips fail to develop into healthy corrections.

Inside Tech

Looking ahead, the upcoming SpaceX IPO will likely keep tech investors anchored to something other than the Middle East-led energy crisis.

It is said that we could see some pullback in hot tech names into the IPO, as investors may be tempted to take profits and free up cash to buy SpaceX shares from next week.

As such, we might see a certain pullback in tech-heavy indices, but that would not necessarily mean that tech is falling out of favour. Rather, it could simply be preparing for a big moment. Like it or not, SpaceX will be the world's biggest IPO by far.

Yes, the company is burning cash.

Yes, there is no certainty that it will be technically capable of building the space infrastructure needed to justify its valuation.

And yes, it is more likely than not that we won't see the company generate substantial cash flows in the next decade to justify is sky-high valuation.

But the valuation of a company like this is more about dreams than value. As such, the stock price has the potential to rise. Given the intensity of expectations, it will probably rise. Going short looks far riskier than staying away.

And given the size of the IPO, major indices are changing their rules to include SpaceX. The company is aiming to secure a market capitalisation of around $1.8 trillion. Even though SpaceX's liquidity won't match the standards applied to other S&P 500 constituents, and Elon Musk will retain outsized voting power of around 85%, the company will become part of everyday portfolios.

That ultimately means that the S&P 500 and Nasdaq — which already look increasingly disconnected from economic reality — could become even more so in the coming months.

Regarding valuations, ETFs tracking these indices will have to buy SpaceX shares to continue tracking their benchmarks. That should support the stock price, while a rising share price could attract even more investors. That's one bright spot heading into next week.

Outside Tech

But outside tech, the story remains the same: persistently expensive energy keeps global yields near multi-decade highs. Central banks are turning more hawkish in an attempt to counter rising oil prices by slowing economic activity. That continues to pressure sectors outside technology and narrows market breadth.

There are two paths forward.

• A resolution of Middle East tensions over the next three to four weeks could bring oil prices sharply lower, easing pressure on yields. That could broaden the rally, redirect capital toward non-tech pockets of the market and build a healthier base for further gains.
• Alternatively, Middle East tensions persist, the Strait remains closed, keeping oil prices elevated as global oil reserves dry out. Yields consolidate near multi-decade highs and eventually push higher, eroding profit expectations and triggering a sharp market correction in which tech would also suffer a meaningful pullback.

Given the complexity of the Middle East situation, I would lean toward the second scenario. But I am a pessimistic person by nature.

For those who watch: US jobs data

Today, investors will focus on the latest US jobs data amid the Middle East and SpaceX headlines. Earlier releases this week showed stronger-than-expected figures, both in terms of job openings and ADP payrolls.

Today's official report is expected to show relatively soft, but not catastrophic, figures. The US economy is expected to have added around 85K nonfarm jobs in May, while average wage growth is seen slowing from 3.6% to 3.4% y-o-y.

AI is replacing certain jobs, and we regularly hear about thousands of layoffs across technology, banking and other sectors as firms use AI to cut costs. What we hear less about are the jobs being created through massive AI infrastructure investment. As such, expectations remain vulnerable to upside surprises.

We can't finish this reasoning without guessing how markets might react:

• Softer-than-expected data would be unlikely to ease inflationary pressures stemming from the Middle East crisis or soften the stance of Federal Reserve (Fed) hawks.
• Stronger-than-expected figures, on the other hand, could fuel risk appetite on the view that the economy remains strong enough to withstand higher interest rates.

As such, I expect that good news will probably be seen as good news. It remains to be seen whether that can outweigh the bad news coming from the Middle East headlines.