Apple’s WWDC Kicks Off, Google Inks $30B Deal with SpaceX

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, June 8th. In today's episode, we'll break down Friday's massive market sell-off and what to look forward to this week. We'll also preview Apple's WWDC event today and a surprise deal between SpaceX and Google. Then stick around to the end of the show to find out why South Korea has been the hottest stock market in the world. We got a great show for you today.
Let's go.
Well, guys, the stock market winning streak came to an end last week, and it ended with a thud. Stocks got wrecked on Friday. The S&P 500 fell 2.6% and the NASDAQ got absolutely smoked, falling 4.2%, which was its worst day in more than a year. Most of the carnage was in chip stocks. The Semiconductor Index fell over 10% on Friday, which was its worst day since the COVID crash back in March of 2020 Names like Micron, Marvell, Intel, and AMD all fell more than 10%, and in total, more than a trillion dollars in market value was wiped out from chip stocks alone in a single day. So it was a brutal sell-off, and that spilled over into other areas like Bitcoin, which briefly dipped under $60,000. And what's funny is that the catalyst for the sell-off was the strong jobs report that we got on Friday morning. We talked about this on Friday's episode, but the May jobs report showed that the US economy added 172,000 jobs, which was more than double what economists were expecting. Now, that's good news for the economy, but it was bad news for the markets because a strong labor market means the Fed has basically no reason to cut interest rates anytime soon. In fact, traders are now pricing in a 43% chance the Fed will raise interest rates before the end of the year, and the odds of two or more rate hikes jumped to 27%. So it's kind of crazy that we started the year off hoping for multiple rate cuts, and we might actually end up with multiple rate hikes. And all of this puts new Fed Chair, Kevin Warsh, in a pretty tough spot. When President Trump nominated him to be the Fed Chair, I think he was hoping that Kevin Warsh would cut rates pretty quickly, but that might not be the case. Kevin Warsh's first meeting as Fed Chair is next week, so can't wait to see what he has to say. Now, beyond just the labor market and a potential rate hike, the other reason behind the Friday sell-off could be that investors are just getting nervous about the AI trade. AI has been the main driver of the market rally this year, and the market had gotten very top heavy. Here's an interesting stat that I read from the Wall Street Journal. The S&P 500 was up more than 11% through May, but if you exclude AI related stocks, the gain was only 2.4%.
So when a certain sector goes up that fast, you start hearing the bubble word being thrown around again, and when that happens, investors can be quick to hit the sell button, which is what we saw on Friday. But look, this morning, chip stocks are bouncing back. I'm seeing a lot of green in pre-market trading. So it's possible that the Friday is just a one day blip, and it could have been a good dip buying opportunity. We'll see how it plays out the rest of the week. And looking ahead, I mean, we have a stacked week coming up. Both the CPI and PPI report dropped this week, which will give us the latest information on inflation. We're also getting earnings from Oracle, which is a big AI name. And then on Friday, SpaceX will start trading in what will be the biggest IPO in history. So yeah, we got a huge week ahead of us. So make sure you guys are locked into the podcast. Even consider sharing it with someone because we're gonna be covering a lot of information over the next few days.
Let's run through some headlines. Starting with Apple. Apple kicks off its annual Worldwide Developer Conference today, and investors will be looking for answers regarding Apple's AI strategy. You know, Apple has been getting clowned for the last couple of years for how bad Apple Intelligence has been since they showed it off at WWDC in 2024 Apple promised the smarter Siri and a bunch of other AI features. And two years later, many of these features still haven't come out. I mean, Siri is still borderline unusable. So we'll see if Apple can quiet the haters today. The rumor is that Apple will show off iOS 27 and Mac OS 27 built around a new and improved Siri. The idea is to turn Siri from a basic voice assistant into an AI companion that can handle multi-step tasks with a single command. I mean, right now, I wouldn't trust Siri to set an alarm for me. So multi-step AI task is a pretty big jump. Now Apple is partnering with Google to make this happen. This new Siri will be powered by Google's Gemini AI models. Apparently Apple is paying Google only a billion dollars a year to license the AI tech, which is a bargain in AI land. Siri being powered by Gemini does give me some hope that it won't be totally useless. But despite Apple's struggles in AI, their stock has been doing pretty decent. Apple stock is up 15% this year, which is tied with Google to being the best performing Mag-7 stock this year. And if you zoom out, shares have gone up 50% over the past 12 months. The advantage that Apple has when it comes to AI is they have a massive base of users, over a billion devices. And those devices are powered by some of the best chips on the planet. So Apple devices like the iPhone and MacBooks and Mac minis could be the best devices to use AI, regardless of what model, and that could help Apple sell more devices in the future. So we'll see if we get some answers about that today. The WWDC keynote starts at 1 p.m. Eastern. And by the way, this will be Tim Cook's last WWDC as CEO, as John Ternes takes over as CEO on September 1st. So it's an end of an era, and hopefully Tim Cook has cooked up some fun surprises for his last keynote. Let's shift gears and talk about SpaceX and Google. According to SpaceX's regulatory filings on Friday, Google has agreed to a massive data center capacity deal with SpaceX that will pay SpaceX $920 million a month for AI computing power. This deal starts in October of this year and runs through June, 2029, which works out to roughly $30 billion total. This is actually the second major AI compute capacity deal that SpaceX has signed. Remember last month, Anthropic signed a similar agreement to rent data center capacity from SpaceX, in which Anthropic is paying $1.25 billion a month. So SpaceX is now fully pivoting into being an AI neocloud company. And it makes sense, right? Remember earlier this year, Elon Musk merged SpaceX with his AI company XAI. And over the last couple of years, XAI had built up two massive AI data centers in Memphis, Tennessee, expecting that their chatbot GROK would get a ton of usage. Well, nobody really uses GROK anymore, so Elon has all his extra capacity going unused. And now he's leasing it to companies like Anthropic and Google that desperately need that capacity. Now, I was kind of surprised that Google didn't have enough capacity, but according to the company, the demand for Gemini Enterprise has surged, and their Google Cloud backlog nearly doubled last quarter to $460 billion.