Wall Street pauses near records as the Fed looms and SpaceX continues to defy gravity

• A US-Iran peace accord promises to reopen the Strait of Hormuz on Friday, though analysts warn it could take months for oil to flow freely; Goldman Sachs has lowered its oil-price forecast in response
• The Federal Reserve begins its two-day meeting with May inflation at 4.2% (highest since 2023), and while no rate change is expected under new chair Kevin Warsh, markets are watching the 'dot plot' for signals of future hikes
• SpaceX stock surged another 10% premarket, positioning it to overtake Amazon as the world's fifth-largest company by market value

Market Summary: Wall Street Pauses Near Records Ahead of Fed Decision

Market Performance:

US stocks opened modestly higher on Tuesday, with the Dow Jones gaining 276 points (+0.5%) to 51,947, the S&P 500 climbing 1.7% to 7,554, and the Nasdaq adding 0.3% to 26,750. Markets continued rallying near record territory following a preliminary US-Iran peace agreement that eased geopolitical tensions.

Key Developments:

A major corporate announcement saw plans to acquire Cursor, an AI coding app maker, in a deal valued at $60 billion. SpaceX gained another 10% in pre-market trading, positioning the company to potentially surpass Amazon as the world's fifth-largest company.

Goldman Sachs lowered its oil-price forecast amid reduced Middle East supply concerns. However, analysts warn that reopening the Strait of Hormuz—promised for Friday—could take months to fully restore oil flows.

Federal Reserve Focus:

The Fed begins its two-day meeting with inflation at 4.2% in May, the highest since 2023, driven by energy prices during the Iran conflict. While no rate change is expected from new Fed Chair Kevin Warsh, markets are closely watching the "dot plot" for signals of future rate hikes. Japan's central bank recently raised rates to a 31-year high, highlighting global inflation pressures.

Economic Data Ahead:

Traders await weekly jobless claims, Philadelphia Fed's business outlook survey, and May's leading economic indicators.

Market Outlook:

Analysts suggest lower energy prices could broaden the rally beyond technology stocks, though higher borrowing costs from central bank responses to inflation may temper enthusiasm. Dave & Buster's underperformed despite the broader market gains.