Pope Leo XIV is expected to sign his first encyclical as soon as Friday, positioning artificial intelligence as the defining moral and labor challenge of a new industrial revolution.

Why it matters: The document, reportedly titled Magnifica Humanitas ("Magnificent Humanity"), would become the Catholic Church's clearest attempt yet to place human dignity, labor rights and ethics at the center of the AI race.

• Catholic and European outlets are reporting that Leo is poised to sign the AI encyclical on the anniversary of Rerum Novarum (1891), Pope Leo XIII's foundational industrial-era labor encyclical.
• The encyclical will focus specifically on AI's impact on "people and working conditions," framing it as Leo XIV's effort to modernize Catholic social teaching for the AI era, per the French newspaper Le Monde.
• Other reports suggest Magnifica Humanitas will argue technology must remain subordinate to the human person — not the reverse — and that AI systems should protect workers, creativity and moral agency.

The Vatican has not commented, but it has implemented formal AI guidelines and monitoring structures inside Vatican City.

Zoom in: The late Pope Francis warned repeatedly that AI risked reducing humans to data points and accelerating inequality, surveillance and autonomous warfare.

• The Holy See also backed the "Rome Call for AI Ethics," an initiative urging transparency and human-centered AI development.

Context: Encyclicals are among the most important documents a pope issues — used to set priorities and define how the Catholic Church responds to major global challenges.

• They often act as blueprints for a papacy, signaling what issues will take center stage for the world's 1.4 billion Catholics.

Zoom out: The Vatican has stepped up cybersecurity partnerships and AI oversight efforts, blending defense with diplomacy and ethics.

• In February, Leo told priests not to use AI to write homilies or to seek "likes" on social media platforms like TikTok.

What they're saying: "This is exactly the fear … that machines were replacing human labor. And that's exactly what we're seeing right now with AI," said Andrew Chesnut, chair of Catholic studies at Virginia Commonwealth University, tells Axios.

• Chesnut said Leo is treating AI less like a tech trend and more like a replay of the industrial revolution, with entry-level workers already "evaporating" as automation accelerates.
• "This is going to be one of the fundamental pillars of his papacy."

Between the lines: Leo XIV's choice of name increasingly looks like a mission statement.

• By invoking Leo XIII, the pope is explicitly drawing parallels between 19th-century industrialization and the AI revolution now unfolding, Catholic experts say.
• The message: The Church believes it has a historic role to play again during a period of technological upheaval.

The intrigue: Some American Catholic institutions have also been preparing for this moment and discussing the use of AI.

• The Catholic Health Care Association of the United States (CHA), for example, has been examining the ethical implications as AI increasingly shapes healthcare delivery.

The bottom line: The Vatican is signaling it does not intend to sit out the AI era.

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Elon Musk's trillion-dollar-plus SpaceX isn't a public company yet, but its size and ambitions are already upending the stock market and sparking questions over the power and influence wielded by such behemoths.

Why it matters: The IPO, expected next month, would signal the start of a new AI era for the public markets, potentially valuing SpaceX as much as $2 trillion.

The big picture: OpenAI and Anthropic are also expected to IPO this year — possibly translating into $5 trillion in value in the markets, estimates venture capitalist and MIT research fellow Paul Kedrosky.

• The new stocks will hit the markets like a tsunami, he says.
• The IPOs will trigger an enormous wave of demand from investors who will pull money out of other assets to buy — sort of like how the ocean pulls back before it crashes over the beach and into the surrounding area upending everything.
• The "scale and consequences" will be massive, he says.

The latest: The S&P 500 is considering changing its rules to fast-track SpaceX's inclusion into the benchmark index.

• If that happened, it would guarantee lots of buyers for the stock — index funds, which make up an increasingly large share of the market, would effectively be forced to invest.

Friction point: Critics say the changes are unfair and distort the stock market.

• "The rules are being rewritten to benefit IPO issuers and early-stage insiders, and your capital is the tool being USED to enrich them," writes long-time investor George Noble on Substack.
• The proposal is "egregious," argues WSJ columnist James Mackintosh, saying that it is an acknowledgement that there are different rules for the big companies.

Yes, but: The market is changing to accommodate these mega IPOs, not because of some conspiracy, but because the indexes want to reflect reality.

• "Investors want indexes to be representative of the market," says Jay Ritter, the director of the IPO initiative at Warrington College of Business at the University of Florida.
• "These companies likely would be included sooner or later unless they totally collapse, so it's mainly a question of timing."

Catch up quick: Nasdaq has already changed its rules for SpaceX to allow for fast-tracking onto the Nasdaq 100 index, which features the biggest tech companies.

Where it stands: The S&P is considering changing the rules for companies it calls "MegaCaps," defined as those with a value that puts it within the top 100 largest by market capitalization. The three proposed changes are:

• There would no longer be a requirement that a company be profitable. (We'll know if SpaceX is profitable or not when its prospectus is made public.)
• The 12-month wait to get included on the index would be cut to six months.
• A requirement that a company needs to offer up at least 10% of its stock to the public would be eliminated. (SpaceX reportedly will have just a 5% float.)

Follow the money: In the 1980s and '90s, most companies that went public were profitable. But in this century, most haven't been, Ritter says.

• "Some of these rules were decided on many decades ago, when the world was a bit different from now."

What to watch: If the proposed rule changes are approved by the May 28 deadline, they would take effect before the market opens on June 8, presumably ahead of the IPO.

Energy — whether it be oil for cars or power for data centers — is suddenly the world's biggest constraint.

Why it matters: Energy is becoming the singular driver of both global stability and economic growth.

• Oil shocks from the Iran war are rippling through inflation and geopolitics.
• The AI boom is triggering a global race for electricity that grids aren't ready for.

The big picture: Energy is the thing we all need but don't notice until it's gone or expensive.

• We're confronting both unprecedented scarcity and demand for energy on a timeline that's considered remarkably sudden for the usually slow-moving energy sector.

Driving the news: Higher oil prices fueled by the Iran war are the main driver behind inflation, with the Consumer Price Index rising 3.8% in April, new data out this week shows.

• Higher energy prices accounted for the bulk of the increase between March and April, Axios' Courtenay Brown reported.
• Compared with the same period a year ago, energy costs are up 18%.

Meanwhile, trouble is also lurking in our power lines.

• The nation's grid watchdog took the unusual step last week of issuing its highest level warning that exploding power demand from AI data centers could strain electricity systems.

How it works: At first glance, the Iran war and the AI boom may not seem to have much overlap.

• Oil is primarily used in transportation, after all, so most of the impact hitting the economy is through gasoline and driving.
• Data centers, on the other hand, require electricity, which is not directly impacted by the war (at least in the United States, thanks in part to ample supplies of domestic natural gas).

Reality check: Whether in our vehicles or our light switches, energy serves the same purpose: it's the engine that makes things go — or the bottleneck that mucks everything up.

What they're saying: "Whether the issue is oil-supply disruption or power-sector strain, the lesson is the same," said Jason Bordoff, founding executive director of Columbia University's Center on Global Energy Policy.

• "When energy is unavailable, unreliable or unaffordable, economies slow, public anxiety rises, and policymakers have little room to focus on anything else."

Between the lines: Even though U.S. electricity isn't directly affected by the war, power prices are going up anyway — partly due to data centers.

• Voter discontent with high power prices could collide with parallel discontent with high prices at the pump.

Friction point: High energy prices could help fuel growing populist sentiment across the country that's also being fanned by worry about AI displacing jobs.

• "Rising energy prices and fewer jobs are making it harder for people to get by and could fuel a feeling that elected officials are not looking out for their interests," Bordoff said.

Yes, but: Data centers are driving a far larger share of power growth in the United States compared to the world as a whole, according to the International Energy Agency.

The bottom line: From battlefields to data centers, the next phase of the global economy will be shaped by who has energy — and who doesn't.

President Trump's remark this week that "I don't think about Americans' financial situation" as he weighs his next moves in Iran may have inadvertently captured the fundamental bind he's in: how to pressure Iran without spooking markets and sending oil prices soaring.

Why it matters: Trump currently has no clear way to square his desire to end the war on his terms with the need to rein in inflation and keep the stock market humming in an election year.

Between the lines: What Trump appeared to mean in Tuesday's remark is that domestic economic concerns won't deter him from whatever steps he feels are necessary to stop Iran from obtaining a nuclear weapon.

• That nuance is certain to be lost in the campaign ads Democrats cut highlighting the quote.
• "The president could have chosen different words, but this is what he thinks," a Trump adviser told Axios.
• The problem, a second Trump adviser acknowledged, is that "Iran has more time, and they're counting on our political calendar to benefit them."

Friction point: Iranian officials have made clear they believe time is on their side, and that Trump is sensitive to rising oil prices and market volatility.

• Recent economic data showing a gas-driven inflation spike — and poll numbers suggesting voters blame the president and his fellow Republicans — don't help Trump's case that he can ride this out as long as it takes.
• Republican pollsters and consultants acknowledge that gas price increases driven by the war in Iran will make it harder to sell their midterm message on issues like tax cuts.
• But the second adviser insisted Trump is "serious about a non-nuclear Iran," political considerations be damned.

The big picture: Trump has made clear ever since a ceasefire was reached six weeks ago that he was in the market for a deal and reluctant to resume the war.

• His negotiators thought they were getting close to a preliminary agreement with Tehran last week, but Iran's counterproposal disregarded Trump's key nuclear demands.
• Trump called the Iranian position unacceptable, and threatened a heavy price for Tehran's inflexibility.
• Trump's team is now discussing options for military escalation to break the deadlock, while recognizing the risk of exacerbating the economic turmoil.

Behind the scenes: U.S. officials don't expect Trump to take any dramatic steps during his trip to China, but think he could make his next move immediately afterward.

• U.S. officials say one option is to resume "Project Freedom," with the Navy attempting to break the logjam in the Strait of Hormuz.
• Another is to launch a new bombing campaign focusing on Iranian infrastructure, as Trump has repeatedly threatened.
• Israeli officials say they'll be on high alert this weekend in case Trump decides to resume the war. Any such operation would take place in coordination with the Israeli military, the officials say.

State of play: Some U.S. officials believe the American blockade is squeezing Iran and could force the country to buckle even without further kinetic action.

• Trump and his team have portrayed Iran as on the verge of economic cataclysm, though at least some U.S. intelligence analyses suggest the economy and oil infrastructure could hold up for several months.
• And while individual Iranians will certainly feel the strain, Iran's authoritarian system is less responsive to public discontent.
• The White House did not respond to a request for comment.

What to watch: Even if Trump declared the war over tomorrow, Iran could still throttle shipping through the Strait of Hormuz.

• If he launches new attacks, there could be a swift rise in oil prices and drop in the stock market.
• But with Iran's latest posture dampening hopes of a deal, expectations of renewed warfare are on the rise.

The bottom line: Trump says he won't think about Americans' finances "even a little bit" if he makes such a decision, insisting that stopping Iran from obtaining a nuclear weapon is his singular focus. In the process, he handed Democrats a ready-made attack ad.

Marc Caputo contributed reporting.