U.S. equities opened higher on Tuesday, building on Monday's record-setting performance. The Dow Jones Industrial Average added 383 points, while the S&P 500 gained 1.65%. The Nasdaq 100 edged down 0.19%, reflecting mixed sentiment across sectors.
Fed Decision in Focus Under New Leadership
Investors are turning their attention to the Federal Reserve's upcoming interest rate decision on Wednesday, the first under newly appointed Chair Kevin Warsh. The central bank is widely expected to hold rates steady at 3.50%–3.75%. However, market participants will scrutinize Warsh's commentary on inflation, employment, and the economic outlook for clues on future policy direction.
Inflation remains above the Fed's 2% target, keeping policymakers cautious. According to CME Group's FedWatch tool, traders currently price in a 42% probability of a quarter-point rate increase by December. Meanwhile, the Bank of Japan raised rates to their highest level in 31 years on Tuesday, responding to energy-driven inflationary pressures.
SpaceX Rally Continues After Blockbuster IPO
SpaceX remains a major market focus following its highly anticipated public debut last week. Shares of the Elon Musk-led company rose another 7% in Tuesday trading, extending gains since its Nasdaq listing. The stock, which priced at $135 per share in its initial public offering, has recently traded above $200.
At a valuation of roughly $2.7 trillion, SpaceX trades at nearly 100 times earnings, a multiple that has drawn attention from valuation-conscious investors. Enthusiasm was further fueled by reports that SpaceX plans to acquire software company Anysphere for $60 billion to bolster its enterprise artificial intelligence capabilities. The continued rally brings SpaceX closer to surpassing Amazon in market value, potentially making it the world's fifth-largest publicly traded company.
For more on SpaceX's post-IPO performance, see SpaceX Stock Slips 2% as Lockup, Short Interest Weigh on Sentiment.
AI and Chip Stocks Gain Momentum
Technology shares broadly strengthened, with AI-related semiconductor and data-storage companies leading the charge. Micron Technology advanced, while Western Digital and Seagate Technology posted notable gains. Qualcomm shares also moved higher following a report that the company is in talks to acquire AI chip startup Tenstorrent for between $8 billion and $10 billion.
For broader market context, see Dow Futures Rise 130 Points as Markets Weigh Earnings, Chip Weakness, and Key Data.
Oil Prices Slide on Iran Deal Hopes
Markets also reacted to news that the United States and Iran have reached a preliminary agreement aimed at ending their conflict and reopening the Strait of Hormuz. President Donald Trump confirmed the deal, and Pakistan Prime Minister Shehbaz Sharif indicated a formal signing ceremony is expected in Switzerland later this week.
The prospect of renewed oil flows from the Middle East pushed crude prices lower for a second consecutive session. Brent crude fell below $80 per barrel for the first time since March, while West Texas Intermediate dropped toward $77 per barrel. Lower energy prices have helped ease inflation concerns and supported broader equity markets.
This article is for informational purposes only and does not constitute financial advice.
