Morning Bid: Central banks take the stage

• BOJ hiked rates by 25 basis points to 1% as expected, continuing monetary policy normalization amid inflation pressures, though the yen remained weak near 160 per dollar
• Brent crude held above $80/barrel after a 5% Monday drop, but tanker traffic through Strait of Hormuz showed no visible increase in tracking data despite the U.S.-Iran deal announcement
• SpaceX shares surged 19% Monday following its IPO, positioning it to potentially become the world's fifth-largest company above Amazon's $2.7 trillion valuation

Market Summary: Central Banks Take the Stage

Key Developments:

Global markets paused on Tuesday after a preliminary U.S.-Iran deal sparked an initial rally, as traders awaited formal details ahead of Friday's signing. Brent crude stabilized above $80/barrel following Monday's 5% decline, though vessel-tracking data showed no significant increase in tanker traffic through the Strait of Hormuz despite Trump's optimistic comments.

Central Bank Actions:

The Bank of Japan delivered an expected quarter-point rate hike to 1%, marking a 31-year high as part of monetary policy normalization aimed at controlling inflation exacerbated by energy shocks. The move had minimal impact on the yen, which remained near 160 to the dollar, raising intervention concerns.

The Reserve Bank of Australia held rates steady at 4.35%, balancing economic slowdown against persistent inflation pressures.

The Federal Reserve and Bank of England are expected to maintain current rates when they meet Wednesday and Thursday, respectively, though policy language will be scrutinized for potential rate path adjustments following the Iran developments.

Corporate Highlights:

SpaceX continued its post-IPO surge, rising 19% Monday and positioning to overtake Amazon as the world's fifth-largest company with a $2.7+ trillion valuation. Over $1.16 billion in SpaceX shares traded.

Nvidia announced a $25 billion bond issuance—its first since 2021—apparently seeking to establish credit benchmarks rather than fund capex.

Economic Indicators:

Presidential approval on cost-of-living issues declined to 24%, down from 22% weekly and 20% monthly. U.S. May housing starts and import price data are due Tuesday at 8:30 a.m. EDT.

The G7 is meeting in France to discuss war, economic conditions, and AI developments.