Dow up 383 points ahead of Fed decision; SpaceX keeps rally

The Dow climbed 383 points on Tuesday as investors awaited the Federal Reserve’s rate decision on Wednesday, the first under new chair Kevin Warsh. The S&P 500 rose 1.65% while the Nasdaq 100 slipped 0.19%. The blue-chip index had closed at a record on Monday.

Traders widely expect the Fed to keep its target range at 3.50% to 3.75%. CME Group’s FedWatch tool placed the probability of a quarter-point rate increase by December at about 42%. Inflation remains above the Fed’s 2% goal.

In Japan, the Bank of Japan raised interest rates to their highest level in 31 years on Tuesday, citing inflationary pressure linked to higher energy costs.

SpaceX gained roughly 7% as its post-IPO rally continued. The company priced its offering at $135 a share and has traded above $200. At an estimated market value near $2.7 trillion, one estimate translates that valuation to about 100 times earnings. Reports indicate SpaceX plans to buy software firm Anysphere for about $60 billion to expand into enterprise artificial intelligence. The stock’s run narrowed the gap with Amazon in market value.

Technology stocks posted gains. Micron Technology, Western Digital and Seagate Technology advanced on expectations of continued demand for semiconductors and data storage. Qualcomm moved higher amid talks to acquire AI chip startup Tenstorrent for $8 billion to $10 billion.

Valuation measures showed the S&P 500 trading at about 32.59 times earnings, the Dow at 24.63 times, and the Nasdaq 100 at roughly 33.10 times. Online trading apps have made these comparisons more accessible to a larger group of investors.

Pakistani Prime Minister Shehbaz Sharif indicated a preliminary agreement between the United States and Iran to end their conflict and reopen the Strait of Hormuz, with a formal signing expected in Switzerland later this week; remarks have been attributed to President Donald Trump. Brent crude fell below $80 a barrel for the first time since March and West Texas Intermediate moved toward $77 a barrel.

Oil prices fell and technology stocks rose as equities gained, while traders remained cautious ahead of the Fed decision, focusing on Warsh’s comments on inflation and the labor market for indications about future policy.