SpaceX Wants Pentagon to Pay Up: 8 Key Items Shaping the Stock Market Tuesday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive market open as investors look to shrug off a flare-up between the U.S and Iran.

1. Tensions remained high between Iran and the United States on Tuesday, threatening to upend fragile diplomacy efforts as Iranian officials warned of retaliation after American strikes overnight. Iran’s supreme leader, Mojtaba Khamenei, said Tuesday that the war with the United States had shown that American military bases in the Middle East are no longer safe, while the Islamic Revolutionary Guards Corps said it would respond forcefully to any U.S. strikes. (NY Times)

US secretary of state Marco Rubio said Washington’s back-channel talks with Iran would continue after American forces carried out strikes targeting Iranian missile launch sites and boats in the Strait of Hormuz. (FT)

Despite these developments, oil prices are down and the Cboe Volatility Index (VIX) is little changed near 16.62. This suggests the market is looking past Tuesday morning’s development toward a potential deal between the U.S. and Iran. With Iran expected to “take a few days,” a breakthrough announcement is not imminent. Both the U.S. and Iran have indicated progress on a memorandum of understanding that could halt the war and restart shipping through the blockaded Strait of Hormuz, while giving negotiators 60 days to negotiate more complex issues including Iran’s nuclear program.

We are in the hopeful camp but still realize the final details will matter most.

2. As U.S. kamikaze drones guided by Elon Musk’s Starlink network began to make visible gains in the war against Iran, senior SpaceX officials reached a conclusion: The Pentagon should be paying more for access to their satellite Wi-Fi network. Within weeks of the United States launching its bombing campaign, SpaceX executives met Pentagon officials and argued the military had been paying about $5,000 for connection per terminal while effectively using a higher tier of service worth closer to $25,000, according to two sources familiar with the matter and Pentagon documents reviewed by Reuters. (Reuters)

Color us a bit cynical if you wish, but when we walked through the SpaceX S-1 filing on Friday, we shared out thinking that during its upcoming IPO roadshow, SpaceX will have to lay out a path to profitability for the company as a whole. The filing revealed very large losses for the company’s Space and AI segments. As we’ve seen before, price hikes are one way to fatten margins and improve the bottom line.

3. Fertiliser companies around the world are cutting production of one of the most vital crop nutrients as the conflict in the Middle East upends supply chains, intensifying concerns over future food shortages. Disruption to shipping in the Strait of Hormuz has hit global supplies of sulphur — required to make phosphate fertilisers that are used on crops including corn, soyabeans, rice and palm oil. (FT)

The reverberation of supply-demand dynamics continues to make headlines and in this case the concern is smaller crop yields and the potential scarcity factor that tends to be a tailwind for higher prices. Sulphur prices, which traded at between $150 and $180 a ton a year ago, have surged to as much as $850 to $900 a ton, with some delivered prices approaching $1,000. That raises questions about the economics of phosphate production and company margins.

4. The interest rate on a 30-year fixed-rate mortgage has surged from under 6% at the end of February to 6.65% Friday, per Mortgage News Daily. Traders are betting that new Federal Reserve chair Kevin Warsh’s first policy move will be to raise rates, not lower them, as inflation expectations are looking increasingly unmoored. (Axios)

Another signal to us that the odds of a rebound in the housing market, especially the single-family housing market, are dwindling. The May CPI and PPI reports will be published on June 10 and 11, respectively, and should we see another step up in the data, and job creation remain status quo, we are likely to see the market’s expectation for a potential rate hike inch up further. During last week’s swearing-in ceremony at the White House as the new Fed Chair, President Trump encouraged Kevin Warsh to be “totally independent” and encouraged him to “do your own thing.”

5. Ferrari is going electric, and that’s a worry for Wall Street. The Italian supercar maker was failing to win over investors on Tuesday after launching its first ever electric vehicle at an event in Rome. The EV is named the Luce, after the Italian word for light. Former Apple chief design officer Jony Ive helped create the car, which Ferrari said would sell for a starting price of 550,000 euros ($640,000). Social-media users panned the new EV, which bears little resemblance to some of Ferrari’s best-known supercars. (Barron’s)

That’s a big-ticket item to stumble on, even for Ferrari (RACE), a company that as of October 2025 said it sees about 20% of its lineup being electric by 2030. The fact that it’s the company’s first-ever five-seater vehicle, in our view, also clashes with the company’s brand perception. The question is to what degree Ferrari’s new strategy is lost in translation when others like Lamborghini and Porsche AG, citing a lack of buying interest, have slowed their electrification plans.

6. Shipments of foreign-branded mobile phones in China for ‌April, including Apple’s iPhones, were up 1.8% from the same month last year, Reuters calculations ⁠based on data released by a government-affiliated research firm on Tuesday showed. The data from the China Academy of Information and Communications Technology showed shipments ‌of ⁠foreign-branded phones within China were at 3.59 million units in April. (Reuters)

Another positive data point for Apple (AAPL) and one that is helping lift the company’s shares on Tuesday morning. We continue to think the next major catalyst for AAPL shares will be the reception to its revamped, AI-enabled Siri that is widely expected to be unveiled on June 8 during the company’s 2026 WWDC keynote. Estimates suggest that about 80% to 85% of active iPhones, roughly 1.1 billion to 1.3 billion, cannot run the company’s Apple Intelligence natively. If Apple can deliver on its revamped Siri, that suggests strong upgrade cycle potential.

7. Economic data today per TipRanks: S&P Case-Shiller Home Price Index (March), FHFA House Price Index (March), Conference Board Consumer Confidence (May), Dallas Fed Manufacturing Activity Index (May)

8. Companies reporting today per TipRanks: AM – AutoZone (AZO). PM – Box (BOX), Zscaler (ZS).

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At the time of publication, TheStreet Pro Portfolio was long AAPL.