Stocks climb as SpaceX IPO fuels tech rally; yen steady after BOJ rate hike

Market moves

Global stocks edged higher on Tuesday after a surge the previous day that followed news of a preliminary U.S.-Iran agreement. Investors, however, adopted a more measured stance as initial optimism about Gulf developments began to fade.

Technology names led gains after SpaceX's blockbuster IPO late last week. The space companys shares jumped nearly 20% on Monday and were up another 10.7% in premarket trading on Tuesday, lifting its market value past the $2 trillion mark. Nasdaq futures ticked up 0.1% while S&P 500 e-mini futures were largely flat.

In Europe, the STOXX 600 rose about 0.6% and hovered near Monday's record high, with industrial and tech-related equipment suppliers among the leaders. Schneider Electric and ASML gained, rising roughly 2.7% and 0.6% respectively, as demand cues for data centres and chipmaking equipment supported their shares.

Nvidia, the world's most valuable maker of AI chips, surprised markets by tapping the bond market for $25 billion. The company said the proceeds would be used for general corporate purposes and to establish a liquid benchmark for future issuance. Nvidia shares were slightly lower in premarket trading following the announcement.

Rates, currencies and commodities

The Bank of Japan raised its benchmark policy rate to 1% in a 7-1 vote, the highest level since 1995. The decision helped push the Nikkei 225 to the 70,000 mark for the first time. Against the dollar, the yen was flat at about 160.31.

Oil prices fell further, sliding about 2.2% to a three-month low just above $81 a barrel. Market participants said restoring full confidence in shipping through the Strait of Hormuz could take weeks despite diplomatic developments, and oil consumers may scramble to rebuild inventories depleted during recent disruptions a dynamic that could limit how far prices fall in the near term, ING strategist Warren Patterson warned.

The dollar index, which measures the U.S. currency against six major peers, held around 99.6. The euro rose about 0.1% to $1.1605, and the pound traded near $1.342 with a Bank of England meeting two days away that is not expected to change policy. The Australian dollar was little changed after the Reserve Bank of Australia left rates on hold, trading about 0.4% weaker at $0.707.

U.S. 10-year Treasury yields eased 2 basis points to 4.45%. Gold, sensitive to U.S. rate expectations, gained around 0.9% to trade near $4,344 an ounce.

Market sentiment and risks

Investors initially cheered U.S. President Donald Trump's announcement of a deal with Iran, but analysts cautioned that the diplomatic breakthrough brings fresh geopolitical fault lines. The White House move could put it at odds with Israel, and many substantive issues including Iran's nuclear program remain to be resolved in follow-up negotiations.

"The reality is we're one step further from worst-case scenarios, and we're one step closer to seeing the codification of the optimism of the market," said Mitch Reznick, group head of fixed income at Federated Hermes. He added that a key question for markets is the extent to which inflation has become systemic, how widely it has permeated the economy, and the resulting effect on consumers.

Westpac analysts said the deal removes a key source of market volatility but cautioned on its durability, noting many sticking points were deferred to subsequent talks.

Overall, equity markets took encouragement from the SpaceX-driven tech rally and easing geopolitical jitters, while central bank moves, bond issuance from major tech firms and the path of oil supply remain important near-term market drivers.