Dow futures are fluctuating around the neutral point, as traders are keen to analyse the yet-to-be-revealed details of a potential peace agreement between the United States and Iran. President Donald Trump asserts that the Strait of Hormuz will be completely unblocked by Friday, despite indications of some disagreement regarding the timeline. Oil prices are experiencing a slight decline; however, concerns regarding inflation remain prevalent in light of the Bank of Japan’s decision to increase interest rates. Elsewhere, SpaceX shares experience a notable increase in extended hours trading, maintaining a significant rise in the rocket company following its groundbreaking public debut.

Dow futures on Wall Street showed little movement on Tuesday, while oil prices continued their downward trend, as investors anticipated further details regarding the preliminary U.S.-Iran peace agreement. By 03:10, the Dow futures contract had increased by 65 points, or 0.1%, while S&P 500 futures remained largely stable, and Nasdaq 100 futures had decreased by 36 points, or 0.1%. The primary U.S. averages experienced gains in the last session, supported by the announcement of a deal aimed at resolving the prolonged conflict in the Middle East that has persisted for over three months. At the same time, shares of SpaceX, Elon Musk’s reusable rocket company, surged, extending a climb following a blockbuster public debut last week. At the conclusion of trading on Monday, the blue-chip Dow Jones Industrial Average recorded an increase of 469 points, representing a 0.9% rise. The benchmark S&P 500 experienced a gain of 123 points, or 1.7%, while the tech-heavy Nasdaq Composite surged by 795 points, equating to a 3.1% jump. “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 noted. Attention is now focusing on the Federal Reserve, which is set to commence its latest two-day policy meeting later today. The central bank is expected to maintain interest rates at their current levels on Wednesday, as officials monitor rising inflationary pressures primarily driven by a surge in petrol prices linked to Iran. Consequently, a significant amount of attention will be directed towards the post-decision remarks from the newly appointed Fed Chair Kevin Warsh.

President Trump indicated that the Strait of Hormuz is expected to be completely reopened by Friday, coinciding with the scheduled meeting of representatives from Washington and Tehran in Switzerland for the formal signing of the interim peace deal. Speaking in France at the start of a Group of Seven meeting, Trump asserted that the strait, which has been effectively shuttered for weeks, is already “partially opened.” He stated, “Ships are starting to go out now, and on Friday it will be completely opened.” However, some uncertainty has surrounded that timeline, according to the source. Citing senior U.S. officials, the report indicated that it may take two weeks for standard shipping operations to return to normal. Meanwhile, Trump indicated that the text of the framework deal is set to be released on Friday, although other officials suggested it might be made public within two days, according to the WSJ. Details remain limited, but reports indicate that, in addition to reopening the strait, the memorandum of understanding will prolong the current ceasefire by 60 days and remove an American blockade on Iranian ports. U.S. Vice President JD Vance, who is set to attend the signing ceremony, stated on Monday that “there are a lot of very important details to figure out.”

In this context, Brent crude futures, the global oil benchmark, were last observed down by 1.3% to $82.12 a barrel. The contract surged past $110 a barrel following the initiation of the joint U.S.-Israeli offensive against Iran in late February, fuelled by concerns over a potential extended closure of the Strait of Hormuz. Before the onset of the conflict, approximately 20% of the global oil and liquefied natural gas traversed the constricted passageway along Iran’s southern coastline. Experts have indicated that, even if the peace agreement remains intact, it could take a while for energy transportation through the strait to return to full capacity, which may result in oil prices staying elevated compared to levels before the conflict. Markets have been closely monitoring crude’s trajectory, particularly amid rising concerns that an energy-induced inflation wave may prompt central banks globally to consider increasing interest rates in response.

Highlighting these concerns, the Bank of Japan raised interest rates by 25 basis points on Tuesday, with the central bank indicating that it will persist in tightening policy in response to persistent inflation. The BOJ raised its benchmark overnight call rate to 1.0% — the highest level in more than three decades. The decision received approval through a 7-1 vote from the BOJ’s rate-setting board. “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 stated, cautioning that this trend is likely to elevate consumer price index inflation beyond the central bank’s 2% annual target. In conjunction with the widely expected increase, the BOJ detailed intentions to scale back its monthly bond purchases in the upcoming quarters.

Shares of Elon Musk’s SpaceX continued to rise on Monday evening, following a remarkable increase of over 19% in their second day of trading, bringing the company near a $3 trillion market capitalisation. The rocket and satellite company achieved a historic milestone last week by completing the largest initial public offering ever, concluding its debut on Friday with a market capitalisation of $2.1 trillion. Its shares then increased by an additional 19.6% on Monday, followed by a further gain of 11.2% after the market closed, trading at approximately $213.99 by 03:49. SpaceX’s rapid ascent has resulted in a market capitalisation that rivals established giants in the stock market, including Alphabet, Apple, and Nvidia.