Will the Biggest IPO in History Crash the Market? History Says It Might
By Dale Gillham
What if the biggest stock market warning sign in the world isn't a recession, a war, or even interest rates? What if it's the SpaceX IPO? The announcement that SpaceX could seek a valuation of around $7.5 trillion in what would become the largest IPO in history has investors excited. SpaceX is one of the most extraordinary companies ever built, sitting at the forefront of space exploration, satellite communications, defence and artificial intelligence.
But if you're an investor, this story might suggest something far more important and that is where we are in the market cycle right now. One of Wall Street's oldest observations is that the biggest IPOs often appear close to major market peaks. Not because the IPO causes the crash, but because deals of this size only become possible when confidence is overflowing and investors are willing to pay almost any price for future growth.
History offers striking example of IPOs listing close to market peaks
The record-breaking AT&T IPO arrived near the peak of the late-1990s boom before the dot-com crash. Coinbase listed during the crypto mania of 2021, just months before digital assets collapsed. Rivian debuted at a valuation larger than many established car manufacturers shortly before growth stocks suffered one of their worst selloffs in decades. The pattern isn't perfect, but it should make investors pay attention.
Companies don't rush to list when investors are scared. They list when markets are booming, valuations are stretched and demand for risk is at its highest.
Property investors have a similar saying. When the world's tallest skyscraper is announced, it often happens near the peak of the property cycle. Extreme optimism creates extreme projects, and by the time they arrive, much of the good news has already been priced in.
Is the SpaceX IPO a warning sign of an impending market crash
Major market tops rarely form when investors are worried. They form when everyone feels comfortable, and making money feels easy and that's why crashes catch so many people off guard. Eventually, markets reach a point where optimism is reflected in prices, with portfolios surging. At that point, the question becomes simple: who is left to buy? None of this means the SpaceX IPO will mark the exact top. Bull markets can keep climbing long after warning signs first appear.
The SpaceX IPO may not cause the next crash, but it could be one of the loudest warning signs yet that we're entering the stage of the cycle where excitement starts replacing discipline and that's often where bull markets begin to die.
What are the best and worst-performing sectors this week?
The best-performing sectors include Information Technology, up over 7 per cent, followed by Energy, up over 2 per cent and Utilities, up over 0.5 per cent. The worst-performing sectors include Real Estate and Healthcare, both down over 2 per cent, followed by Communication Services, down over 1 per cent.
The best-performing stocks in the ASX top 100 include Pro Medicus, up over 20 per cent, followed by Life360, up over 12 per cent and WiseTech Global, up over 11 per cent. The worst-performing stocks include Resmed Inc, Stockland and AMP Ltd, all down over 7 per cent.
What's next for the Australian stock market?
This week, the All-Ordinaries Index posted a modest loss of 0.54 per cent by Thursdays close reversing the positive momentum that began the week before. The Materials sector drove the bearish result for the index, while a recovery in the Technology and Energy sectors were beacons of light in an otherwise lacklustre market.
What I find most encouraging is that the market appears to have broken the downward momentum that had been weighing on prices in recent weeks. While it's still early days, the technical break is constructive and suggests buyers are beginning to poke for dominance. If this continues, I believe the market will once again set its sights on the now infamous 9,200 level.
Regular readers will know this is a level I've been discussing for some time. It has already triggered three separate reversals, making it a significant barrier for the market. However, history shows that repeated tests of a major resistance level often weaken it over time. This upcoming challenge will be the fourth attempt, and statistically, this is where the probability of a breakout begins to increase significantly.
Whether we see a brief pause at 9,200 before pushing higher or break through it in a single move remains to be seen. Either way, I expect the All Ords to be trading above this level during the second half of the year.
What's interesting is that even if we do achieve that breakout, the market's overall return for the year would still be relatively modest. After all, the All Ords began the year around the 9,000-point mark and has spent much of 2026 moving sideways.
For now, the key support level remains 8,800. More importantly, this continues to be a highly selective market. While the index has largely moved sideways, certain sectors and stocks have delivered exceptional gains. That's why identifying where the money is flowing remains critical. In markets like these, stock selection matters far more than simply following the index.
Good luck and good trading.
Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.
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