Oil slides, Wall St rallies and SpaceX soars 20%

Good morning. Here’s what happened overnight and what you need to know today.

1.

Strait up: Wall Street’s main indexes rallied overnight, with the Dow touching an intraday high, after the US and Iran struck a preliminary agreement to end the war and reopen the Strait of Hormuz, easing inflation fears as crude oil prices dropped. US crude futures plummeted 5% following the news and hit their lowest level since March, aiding shares of energy-sensitive airline and cruise stocks while hurting energy shares. Speaking at the G7 summit in France, Donald Trump said the strait “will be completely opened" by Friday. Rate-sensitive technology stocks rallied, with the Philadelphia SE Semiconductor index hitting a record high (up 5.45%). SpaceX shares closed 19.60% higher, extending Friday’s double-digit gains after a blockbuster debut last week. The drop in oil prices prompted traders to pare back bets on a US Fed rate rise this year, reversing from a week earlier when a stronger-than-expected May jobs report had pushed the odds of a 2026 hike above 70%. In corporate news, American Express agreed to buy TheFork, Tripadvisor’s European restaurant booking platform, for USD700 million. Salesforce agreed to buy AI customer-service firm Fin for about USD3.6 billion ($5 billion) to complement its own Agentforce tool. And a federal judge dismissed Elon Musk’s xAI suit accusing OpenAI of stealing trade secrets for its Grok chatbot. (Reuters)(Bloomberg)(WSJ)

2.

Streaming play: Fox Corp shares tanked after it agreed to acquire Roku in a cash-and-stock deal valued at about USD22 billion ($31.1 billion) including debt. The deal will blend Fox’s sports, news and entertainment channels, including the free, ad-supported Tubi, with Roku’s streaming platform of more than 100 million subscribers, creating the third-largest player in the US television market by share of viewing. “This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile,” Fox CEO Lachlan Murdoch said. Fox shares fell as much as 18% to USD 48.31 before closing at USD49.96. Fox will pay USD96 in cash and 0.9693 Fox Class A shares per Roku share, valuing the transaction at USD160 per Roku share. Existing Fox shareholders are expected to own about 73% of the combined company and Roku shareholders about 27% once the deal closes. Allen & Company, Morgan Stanley and Goldman Sachs advised Fox. Qatalyst Partners advised Roku. (Capital Brief)(Fox)(Roku)(Bloomberg)

3.

AI bond: Nvidia is set to raise USD25 billion ($35.4 billion) from a high-grade bond sale that received more than three times that amount in demand, its first bond deal in five years, according to media reports. The deal attracted about USD85 billion of orders at its peak, and was upsized from an initial USD20 billion on the back of that demand, according to the reports. Goldman Sachs, JPMorgan and Morgan Stanley are the bookrunners. The notes are divided into seven parts, with maturities ranging from two to 30 years. Proceeds will refinance outstanding debt among other uses, according to the reports. The company joins a wave of tech giants including Alphabet and Amazon flooding debt markets with hundreds of billions of dollars of issuance as they build data centres and other infrastructure needed for AI’s expansion. Nvidia is set to benefit from lower borrowing costs, as the preliminary agreement between the US and Iran to end their conflict helped fuel a rally in the bond market. (Bloomberg)(FT)

4.

Privilege fight: Allens has reputedly obtained advice from leading silk Perry Herzfeld SC that the parliamentary inquiry into KPMG could quickly progress to the High Court, setting up a test of the powers of parliamentary committees, Capital Brief reported. Allens and Ashurst, the two law firms called to appear, are expected to block any questions on their work for the consulting giant on the grounds of legal professional privilege. That would resist the view of Labor senator Deborah O’Neill, who chairs the committee holding Friday’s hearing into the KPMG audit leaks scandal, that legal privilege “runs out at the Senate door”. KPMG allegedly used the confidential data of clients such as Lendlease to win audit work and repeatedly dismissed concerns raised by a whistleblower until O’Neill raised them in parliament in March. If the committee, which has called more than 30 witnesses, insists the lawyers answer questions and even threatens contempt of parliament, it would likely lead to a stand-off. (Capital Brief)

5.

Full ban: UK Prime Minister Keir Starmer announced what he described as a “full ban” on children using social media, going beyond limits imposed by Australia last year to create one of the strictest online crackdowns in the democratic world. Starmer said children under 16 would be prevented from using all major social media platforms, including Meta’s Instagram and Facebook as well as Snapchat, TikTok, YouTube and X, while also taking aim at livestreaming and communication between strangers on gaming sites. “It will make our children safer. It will make our children happier, it will give them more time, more security, more freedom to grow up, more opportunity,” Starmer said in a press briefing. Messaging apps including WhatsApp and Signal would be excluded, as will educational services YouTube Kids and Google Classroom. Starmer wants the ban to be in place early next year, with age verification technology used to enforce the restrictions. A spokesperson for Meta said the company shared the goal of keeping teens safe online but did not think bans would achieve it. (Bloomberg)(FT)

6.

Excise exit: Labor appears more likely to let its fuel excise cut expire at the end of the month after the US and Iran confirmed a deal to suspend the Middle East war. The imminent reopening of the Strait of Hormuz, through which a fifth of the world’s oil supply flowed, has increased the likelihood Labor will not extend the cut, as oil prices dropped on news of the deal. A government source told Capital Brief the announcement was shaping its thinking over extending the $2.5 billion cut, introduced as a three-month measure in March, which currently cuts the price of fuel by 32 cents a litre at the bowser. But the source insisted a final decision would not be made until the end of the month, with the situation remaining volatile. The excise had been reviewed weekly since it was cut. It comes after US President Donald Trump confirmed an agreement to extend a ceasefire for 60 days would be signed on Friday. Publicly, Prime Minister Anthony Albanese said the decision would be made “over coming days”, with the expenditure review committee to meet at the beginning of next week. (Capital Brief)

7.

Chess mess: The ASX signed off on an upbeat market release about its CHESS upgrade despite figures inside the bourse operator being concerned about delays for at least three months. Newly released court documents, obtained in the wake of the ASX’s settlement with the corporate regulator for misleading the market, lay out for the first time the timeline behind the bungled tech upgrade and how it was disclosed to investors. The documents show the ASX placed a “red” classification on the CHESS project on 21 December 2021, indicating significant issues or risks, but its board was not informed until a meeting on 9 February 2022. Following that meeting the ASX drafted a public release saying the project was “progressing well”, and then chief executive Dominic Stevens reviewed it and replied “looks good”. The ASX admitted the “progressing well” representation was misleading. The bourse operator has agreed to a $20.5 million penalty and to pay $3 million of ASIC’s costs in a deal struck hours before a Federal Court trial was due to start. (Capital Brief)(ASIC)

8.

Lowball partner: UK retail billionaire and former Newcastle United owner Mike Ashley has put his infamously aggressive M&A playbook to work on the ASX, launching a hostile, no-premium takeover bid for footwear retailer Accent at a price near historic lows. The bid came just over a year into a 25-year strategic partnership between Frasers and Accent to roll out the Ashley-founded Sports Direct brand in Australia. Frasers first acquired a near 15% stake in Accent from retailer Brett Blundy in 2024 and has steadily built its position to 22.9%. Citi analyst Sam Teeger described the offer as “highly opportunistic” in a note to clients, and said it was not offering a “control premium”. But the 65 cents per share offer lifted the stock nearly 15% following the news, which Harvest Lane’s Luke Cummings attributed to “a whole bunch of shorts that need to cover”. A source close to the deal told Capital Brief that Frasers would be conditionally able to nominate a second board director if its shareholding hit at least 26%. Frasers is also calling for Accent chair Lawrence Myers to step down. (Capital Brief)