At the opening bell, the benchmark S&P 500 and the technology-focused Nasdaq Composite were little changed. The Dow Jones Industrial Average rose around 0.4%, extending gains after reaching a record closing high on Monday.
Investors are reassessing the impact of the recent US-Iran peace agreement. While the deal has raised hopes that the strategically important Strait of Hormuz will reopen to normal commercial shipping, analysts warn that restoring full oil flows could take several months. Details of the agreement remain sketchy, adding to market uncertainty.
The Strait of Hormuz is one of the world’s most important oil transport routes. US officials have indicated that commercial vessels will be allowed to pass through without paying tolls once operations resume.
Meanwhile, these developments come as the Federal Reserve begins its June policy meeting. The US monetary policy regulator is set to announce its interest rate decision on Wednesday. Markets widely expect policymakers to leave rates unchanged, but investors will closely examine the Fed’s updated economic forecasts and interest-rate outlook.
Recent inflation data has remained higher than expected, owing to rising energy prices linked to the conflict in Iran. Meanwhile, the Bank of Japan increased its benchmark interest rate to the highest level in 31 years on Tuesday as it seeks to contain inflationary pressures.
This week’s Fed meeting is the first under Chair Kevin Warsh, who was backed by President Donald Trump. Some analysts believe Fed officials may signal the possibility of additional rate increases later this year.
On the stocks front, SpaceX shares continued their strong post-listing rally. The stock jumped another 10% on Tuesday, marking its third consecutive day of gains.
Elon Musk-backed company’s market value climbed to approximately $2.72 trillion, surpassing Amazon’s estimated valuation of $2.65 trillion and making SpaceX the world’s fifth-largest publicly traded company.
SpaceX shares have gained roughly 60% since the company’s initial public offering at $135 per share. Investor enthusiasm increased after the company announced the acquisition of artificial intelligence coding tool Cursor and launched options trading for its stock.
With its valuation approaching Microsoft’s market capitalisation of about $2.92 trillion, SpaceX is moving closer to becoming the world’s fourth-largest company. However, a significant gap remains between SpaceX and the three largest technology companies, Nvidia, Alphabet and Apple, each valued at more than $4 trillion.
