In May, AI Cut 40,000 Jobs
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Two data points today, read together, send a chill down the spine.
One from the Labor Department: initial jobless claims jumped to 225,000 in May, above expectations. The other from the Challenger report: total US layoffs in May reached 97,000, the highest since May 2020.
Tech alone cut 38,242 jobs — the worst month since August 2024. And the number-one cited cause: artificial intelligence. For the third straight month. AI-driven job losses totaled 38,579, accounting for 40% of all May layoffs.
This isn't a future prediction — this is happening right now.
If you're still in the labor market, take a moment to consider: how much of your current job can be improved by AI? And how much could be replaced by AI? M&A-driven layoffs are rising; bankruptcy-driven unemployment is rising too — companies are using AI to redesign their org charts.
Thursday's tape printed a rare divergence: the Nasdaq fell alone while the Dow and Russell 2000 led. Broadcom's soft forward guide drove the Philadelphia Semiconductor Index down 6% intraday; it closed down 2%, with 21 of 30 constituents in the red.
But watching only the Nasdaq misses today's real story. In the S&P 500, 363 stocks rose and 139 fell. Nine of eleven sectors finished green. Healthcare, financials, and communication services led. The money didn't leave the market — it relocated.
AMD dropped 7% intraday, narrowed to -3% at the close, then lost another 3% after-hours. Marvell was even wilder — +4% intraday, -6% after-hours, a 12-point round-trip in a single session. This kind of action has nothing to do with fundamentals.
The problem is the SpaceX IPO is violently siphoning liquidity. Semis had run hard and were sitting on heavy profit tapes, so naturally they became the first to be drained. The market isn't looking at earnings or valuation lately — it's looking at "can it be hyped," "is there a story," "where is the flow going."
Technically, SOXX has layered support at 556–577, 489–532, and near 460 — but it's all moderate support, no strong shelf. Strong support sits at 368, which is far away. SMH is similar: 589–613 is moderate support, and strong support is below 419. With weak overhead support, the tape either breaks through or chops sideways for a long time until a new shelf forms. Both paths mean you shouldn't expect semis to resume the main uptrend anytime soon.
Bank of America upgraded to Buy, Morgan Stanley maintained Overweight — two majors upgrading together triggers passive flow buying.
While semis were getting mauled, UnitedHealth Group (UNH) surged on heavy volume. BofA lifted its price target from 420 to 450; Morgan Stanley from 395 to 453. UNH's path wasn't easy: crash, base, bounce, re-drop, re-bounce — break 314, push through 347, and step up again. Phase target now approaches near 440, and the tailwind has arrived.
But a word of caution: the stock has already bounced to the midpoint of its 2027 forward-earnings valuation — essentially pricing in a year early. Above that it becomes expensive. Anyone trading the swing or the rebound should seriously consider partial profit-taking around 440. Those holding out for the $600 all-time high should be prepared to hold for two years or more.
The roadshow launched June 4–5. Pricing is locked at $135/share (post 5-for-1 split), final pricing date June 11, almost certainly unchanged. Listing is Friday June 12 on the Nasdaq under ticker SPCX. Plans call for issuing ~555.6 million Class A shares, raising ~$75B, implying a $1.75 trillion valuation.
Many newcomers assume that at 9:30 a.m. on IPO day, the stock opens at $135. Not at all. Nasdaq has a dedicated crossing process for SpaceX: there will be a 10-to-40-minute indication period before the open, publishing reference clearing prices and order imbalance info. The opening price is set by the order book, not necessarily $135. When Facebook listed in 2012, a system glitch delayed the open until 11 a.m.
On index inclusion, a meaningful development: the S&P Dow Jones committee rejected a proposal to relax rules for mega-IPOs. SpaceX won't enter the S&P 500 until June 2027 at the earliest, and must meet profitability criteria. The Nasdaq Composite adds it within days; the Nasdaq 100 roughly 15 trading days later.
SpaceX trades at over 90x price-to-sales, is still deeply loss-making, has minimal float, and a high retail allocation — early trading-day volatility may exceed anything you've seen in any new listing. Total loss of principal is a real possibility.
Neither recommending nor discouraging participation. But you must know what you're betting on. The $1.75T valuation isn't a story, it's a price. Future performance depends heavily on Starship development, Starlink subscriber growth, and space-AI infrastructure — none of which carry any certainty.
In April and May, bold retail traders outperformed most hedge funds — that's a fact. But that's not a strategy.
If your capital base is small, swinging for doubles is understandable. But if your capital took years to build to its current size, then in this recent storm only one thing matters: protect your profits.
Whether the SpaceX IPO ends the bull run or pulls in even more crazies — no one can say for sure. A name like Broadcom can hammer the index by 6% in a single day; what follows will only be more violent. Those already in profit, take some off. Those not yet positioned, don't dive into the market at its hottest moment. Style rotation comes wave after wave — there's never a shortage of next opportunities.
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Disclaimer: This article is personal market observation and trading review only, and does not constitute investment advice. Markets carry risk; trade with caution.