Pre-Market Update: Fed Rate Decision and Iran Deal Details Weigh on Stock Futures Tuesday

TLDR

• Dow, S&P 500, and Nasdaq futures are nudging higher but the post-Iran peace deal rally is slowing
• The Fed’s first rate meeting under new Chair Kevin Warsh begins Tuesday, with a decision due Wednesday
• Reopening of the Strait of Hormuz could take months, dampening oil and market optimism
• SpaceX shares are rising for a third straight day post-IPO, nearing Amazon’s market cap
• Bitcoin climbed 1.1% to $66,346, reflecting broader positive risk sentiment

Wall Street took a breather on Tuesday after a strong run fueled by the US-Iran peace deal. Futures across the three major indexes were up only slightly in early trading.

Dow Jones Industrial Average futures rose just 0.1% after the index closed at an all-time high on Monday. S&P 500 futures were also up 0.1%, while Nasdaq 100 futures gained 0.3%.

Monday’s rally was driven by news that the US and Iran had agreed to sign an interim peace deal this Friday. The Nasdaq had its best session since late March, with investors piling into AI and tech stocks.

But the mood shifted slightly on Tuesday as questions about the deal’s details emerged. No full text of the agreement has been released yet.

Strait of Hormuz Reopening May Take Months

A key part of the peace deal involves reopening the Strait of Hormuz to commercial shipping. US officials confirmed that traffic would be allowed through without tolls.

However, analysts warn the process could take months to fully ramp up. That uncertainty is keeping some investors cautious.

Oil prices continued to slide on Tuesday. Brent crude fell 1% to $82.34 a barrel, while West Texas Intermediate dropped 0.8% to $80.07.

Higher energy costs over recent months have kept inflation running above expectations. That gives the Federal Reserve a tricky backdrop heading into this week’s policy meeting.

The Bank of Japan raised its benchmark interest rate to a 31-year high on Tuesday, citing similar price pressures.

Fed’s Kevin Warsh Takes Center Stage Wednesday

The Federal Reserve begins its two-day June meeting on Tuesday. The rate decision comes Wednesday and will be the first under Chair Kevin Warsh, who has the backing of President Trump.

Markets are almost certain the Fed will hold rates steady this time. But Warsh’s press conference is being watched closely.

Many on Wall Street expect the Fed’s “dot plot” — its map of future rate expectations — to shift toward hikes later this year.

The 10-year Treasury yield dipped 2 basis points to 4.46%. The US dollar edged up 0.1% against a basket of currencies.

SpaceX shares rose for a third straight day following its IPO. The company is now closing in on Amazon’s market cap, which would make it the world’s fifth-largest company.

Bitcoin gained 1.1% over the past 24 hours, reaching $66,346, reflecting the cautiously positive mood across risk assets.

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