Dow hits record high as oil slides; SpaceX soars

NEW YORK: The Dow Jones Industrial Average touched an intraday record high on Tuesday as oil prices slid further on optimism around a US-Iran peace deal, while SpaceX surpassed Amazon’s market value to become the fifth-most valuable US firm.

Shares of SpaceX climbedmore than 10 percent, helping the AI and rocket giantsurpass Amazon’s market value and even briefly top Microsoft as its blistering post-IPO rally continued.

Broadly, investors were rotating into economically sensitive sectors such as financials and industrials, while dumping technology stocks, after news of a preliminary deal to end the Middle East conflict eased concerns about inflation and any dent to economic growth.

The S&P 500 technology index fell 1.5 percent, while financials rose 1.6 percent.

Shares of JPMorgan Chase climbed 3.7 percent, while Bank of America added 2 percent.

The US-Iran interim deal would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which Iran has effectively blocked since the US and Israel attacked Iran in February.

Oil prices slumped more than 5 percent despite doubts about the deal as shippers said it could take weeks for confidence to return after any reopening of the Strait of Hormuz.

A surge in energy prices has raised concerns that major central banks could raise interest rates to tame inflation.

Investors widely expect the Federal Reserve to hold interest rates at the 3.50-3.75 percent range on Wednesday, though they will pay close attention tonew Fed Chairman Kevin Warsh’s comments on inflation, unemployment and the economic outlook.

“You have the Fed tomorrow coming out. No one’s really expecting much, but with the new Fed chair, people have overestimated the potential for a rate hike,” said Joe Saluzzi, co-head of equity trading at Themis Trading.

At 11:58 a.m. ET, the Dow Jones Industrial Average rose 445.50 points, or 0.87 percent, to 52,115.23. The S&P 500 lost 13.31 points, or 0.17 percent, to 7,541.38 and the Nasdaq Composite lost 134.95 points, or 0.51 percent, to 26,548.74.

Inflation, in particular, is stuck more than a percentage point above the Fed’s 2 percent target, and Warsh’s characterization of whether and when it is likely to fall will be a key first step in the evolution of monetary policy under his leadership.