NATO Allies Announce Billions in New Spending to Placate Trump

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Daniel Bach (0:33)

Top Democrats push for Graham Platner to exit Maine's Senate race following sexual assault allegations. Plus, what SpaceX joining the NASDAQ 100 means for your ETFs. And NATO announces military deals worth billions of dollars, hoping to placate US demands for allies to step up.

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It is a real success story. Again, made in NATO.

Daniel Bach (1:05)

It's Tuesday, July 7th. I'm Daniel Bach for the Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

Maine's Graham Platner is widely expected to pull his candidacy for Senate today, with top Democrats withdrawing their endorsements overnight. That's after a woman Platner had been romantically involved with publicly alleged that he sexually assaulted her. He denied the allegation in a video yesterday, saying he would reassess his Senate bid. But now, state and national lawmakers are calling for Platner to drop out of the race. Here's Maine's House Speaker Ryan Fectow, courtesy of Maine's total coverage.

Ryan Fectow (1:45)

The concerns have been mounting, and I think that's the primary issue here, is the number of revelations about Graham's past have accumulated. And that is what I think is causing the greatest deal of concern for all of us.

Daniel Bach (2:06)

The development is set to damage Democrats' hopes in one of the party's most important Senate races this year. Almost any path for Democrats to gain the four seats needed for a Senate majority includes winning in Maine. July 13th is the cutoff for any changes to November's ballot. If Platner withdraws by then, the Democratic Party will have until July 27th to find a new nominee.

All eyes are on the NASDAQ 100 today with SpaceX set to join. That follows a decision by the index to fast track newly public mega cap companies under new inclusion rules.

Elon Musk's rocket company has been on a wild ride since its IPO last month, racking up a $2.1 trillion market cap with more potential big moves ahead. Journal Markets reporter Caitlin McCabe says that's key for index tracking funds, which have been gearing up for a SpaceX buying spree.

Caitlin McCabe (2:58)

So all of the exchange traded funds and mutual funds that track the NASDAQ 100 had to buy SpaceX shares after markets closed yesterday. And that's because these funds are supposed to resemble the NASDAQ 100 and track its performance. So they need to be ready for today with SpaceX in their portfolios. So that will likely add some buying pressure to the stock and benefit it in the short term.

But you can't really extrapolate what that will mean for the stock long term, especially as employee lockup periods end over the next year, and they'll be looking to sell their shares.

Daniel Bach (3:34)

And Caitlin says because SpaceX sold less than 5% of its total shares in last month's public offering, people invested in market tracking funds will be less exposed to the company than they might think.

Caitlin McCabe (3:45)

Despite the fact that SpaceX has a more than $2 trillion valuation, it won't enter the NASDAQ 100, which is a cap-weighted index, as one of the top components. It'll be treated more like a $300 billion company, and it'll have an index weight of less than 1%.

So if you're an investor and you're worried about SpaceX or not interested in the stock, you're not going to have some sort of out-sized exposure to it if you own a fund that tracks the NASDAQ 100 You know, on the other hand, if you want more SpaceX, you might have to consider other ways of getting it, like buying the stock outright.

Daniel Bach (4:21)

And you can find an explainer on what SpaceX means for the NASDAQ 100 in our show notes.

Well, futures for the tech-heavy NASDAQ are down this morning, along with shares in Asia, as the chip-led AI rally takes a little breather. Shares in Samsung are down about 8% despite the company reporting a 19-fold jump in profit for the second quarter. Shares in fellow South Korean chip company SK Hynex are also down around 7%, dragging on the country's main index. Analysts did note that this latest correction in Korean stocks should be viewed in the context of its recent historic rally, where some investors appear to be cashing in on the Cospi's roughly 100% surge in the first half of the year. US listed shares of SK Hynex will start trading on the NASDAQ 100 on Friday.