Investors remained focused on a mix of geopolitical, monetary policy and corporate developments on Tuesday, with attention centred on the emerging U.S.-Iran peace framework, the Bank of Japan’s latest rate increase and the continued surge in SpaceX (NASDAQ:SPCX) shares.
Wall Street Futures Pause After Strong Rally
U.S. equity futures traded close to unchanged as markets digested Monday’s gains and awaited additional details on the agreement between Washington and Tehran.
At 07:10 GMT, Dow futures were up 0.1%, S&P 500 futures were flat and Nasdaq 100 futures slipped 0.1%.
The previous session saw strong gains across major U.S. indices after news of the agreement helped reduce concerns about prolonged instability in the Middle East. The Dow climbed 0.9%, while the S&P 500 and Nasdaq rose 1.7% and 3.1%, respectively.
“The driver of the equity advance was the Iran deal, not so much because people feel the agreement will be a powerful source of incremental upside itself but instead that by removing it as a potential risk factor, stocks will be able to focus on what are encouraging earnings fundamentals,” analysts at Vital Knowledge said in a note.
Investors are now preparing for the Federal Reserve’s latest policy decision, with interest rates expected to remain unchanged and markets closely watching guidance from Fed Chair Kevin Warsh.
Focus Remains on Hormuz Reopening
President Donald Trump said the Strait of Hormuz should be fully operational by Friday, when U.S. and Iranian officials are expected to formally sign the interim agreement in Switzerland.
Speaking at the G7 summit in France, Trump stated that the vital shipping route is already “partially opened.”
“Ships are starting to go out now, and on Friday it will be completely opened,” he said.
While optimism has improved, reports suggest some officials believe shipping conditions may take longer to normalize.
The framework agreement is expected to include a 60-day extension of the ceasefire, the reopening of Hormuz and the lifting of the U.S. blockade on Iranian ports. Vice President JD Vance cautioned that “there are a lot of very important details to figure out.”
Oil Retreats as Supply Fears Ease
Crude prices extended recent losses as concerns over prolonged supply disruptions continued to ease.
Brent crude declined 1.3% to $82.12 a barrel after previously rallying above $110 during the height of the conflict. The market remains sensitive to developments in Hormuz, which normally handles around one-fifth of global oil and LNG shipments.
Although the agreement has improved sentiment, analysts expect energy markets to remain volatile until normal shipping volumes are fully restored.
BOJ Delivers Another Rate Increase
The Bank of Japan raised its benchmark interest rate by 25 basis points to 1.0%, marking the highest level in more than three decades.
The decision reflected ongoing concerns that higher energy costs could continue feeding through to broader inflation.
“The price pass-through stemming from the rise in crude oil prices has been progressing at a relatively fast pace in business-to-business transactions, which could spread to an increase in consumer prices,” the BOJ said in a statement.
The central bank also confirmed plans to slow its bond-buying programme in the months ahead.
SpaceX Approaches $3 Trillion Valuation
SpaceX (NASDAQ:SPCX) continued its extraordinary post-IPO performance, extending gains after another strong trading session.
Following the largest stock market debut on record, the company’s market capitalization has rapidly expanded from approximately $2.1 trillion at Friday’s close to nearly $3 trillion.
The shares gained 19.6% on Monday and added a further 11.2% in after-hours trading, reaching around $213.99.
The rally has elevated SpaceX into the ranks of the world’s largest publicly traded companies, placing it alongside names such as Alphabet, Apple and Nvidia.
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