Wall Street is roaring higher on Monday, with the Dow Jones Industrial Average hitting a fresh intraday record as investors cheer signs of easing tensions in the Middle East. The cherry on top is, it seems to be another strong day for newly listed SpaceX. At 10:24 a.m. ET, the Dow Jones Industrial Average jumped 601.17 points, or 1.17%, to 51,801.43, marking a new intraday record. S&P 500 climbed 113.70 points, or 1.53%, to 7,545.16, while the Nasdaq Composite surged 609.76 points, or 2.36%, to 26,498.61. The rally comes as investors return to riskier assets after weeks of uncertainty linked to geopolitical tensions and concerns over inflation.
SpaceX extends gains on first full trading day
SpaceX shares rose another 6% on Monday after soaring 19% during their stock market debut on Friday. The company officially went public on June 12 under the Nasdaq ticker “SPCX” in the largest IPO ever. SpaceX raised $75 billion by selling 555.6 million shares and, after its strong debut, its market value climbed above $2.2 trillion. Investors see the successful listing as a sign of strong demand for major technology and innovation-focused companies.
“A successful SpaceX IPO is generally a positive signal for broader investor interest in innovation and technology,” said Evan Schlossman, principal at SuRo Capital to CNBC. “It reflects the demand and enthusiasm investors have for companies in these sectors.”
Trump announces Iran agreement
Investor sentiment also received a boost after President Donald Trump said late Sunday that an agreement with Iran was “now complete.” According to Pakistan Prime Minister Shehbaz Sharif, a memorandum of understanding is expected to be signed in Switzerland on Friday.
The announcement eased fears that recent tensions in the Middle East could escalate further. Over the weekend, an exchange of fire between Israel and the Iran-backed Hezbollah in Lebanon had raised concerns about whether diplomatic efforts would succeed.
Oil prices fall as Strait of Hormuz reopens
Trump also said he had authorised the reopening of the Strait of Hormuz, one of the world’s most important oil shipping routes. This sent oil prices lower. US crude oil was down about 5% and trading near $80 per barrel. Lower oil prices are generally viewed as positive for the economy because they can reduce inflationary pressures and lower costs for businesses and consumers.
Investors look to the Federal Reserve
Falling energy prices have increased hopes that the Federal Reserve may eventually have more flexibility on interest rates. Robert Pavlik, senior portfolio manager at Dakota Wealth, told Reuters that easing inflation pressures could create a more favourable environment for stocks in the months ahead. Recent inflation data showed that higher energy prices had contributed to rising consumer prices in May, making this week’s Federal Reserve meeting particularly important for investors.
The meeting will be the first under Fed Chair Kevin Warsh. Markets widely expect the central bank to keep interest rates unchanged, with futures markets indicating a more than 98% probability of no rate move. Alongside the Fed meeting, investors will closely watch upcoming housing and retail sales data for clues about the strength of the US economy.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.