The Dow Jones Industrial Average reached a new record high on Tuesday, supported by falling oil prices and growing optimism over a potential peace agreement between the United States and Iran, while SpaceX extended its rally and surpassed Amazon in market value to become the fifth-largest US company.

SpaceX shares climbed about 9.5%, helping the Elon Musk-led company overtake Amazon in market capitalization.

The company also announced the acquisition of software firm Anysphere for $60 billion, a move aimed at strengthening its presence in the enterprise artificial intelligence market.

Memory-chip related stocks posted strong gains, with Western Digital rising 9% and Seagate Technology advancing 6%.

However, the technology sector within the SP 500 slipped 0.5% after the sharp gains recorded in the previous session.

Seven of the eleven major sectors in the SP 500 traded higher as investors rotated toward stocks more closely tied to economic activity.

Financial stocks led the gains, with the sector rising 1.1%.

Goldman Sachs advanced 1.3%, providing support to the Dow Jones, while JPMorgan gained 1.8% and Bank of America rose 1.2%.

Meanwhile, the energy sector fell 0.4% as oil prices hovered near their lowest levels in almost three months.

US stocks had rallied strongly in the previous session after President Donald Trump announced the signing of a preliminary agreement to end the conflict with Iran.

Despite that, uncertainty surrounding the deal remains, as shipping operators warned that restoring confidence in navigation through the Strait of Hormuz could take weeks even after its reopening.

Markets await the Federal Reserve decision

Investor attention is now focused on the Federal Reserves monetary policy decision due on Wednesday.

The US central bank is widely expected to keep interest rates unchanged within the 3.50%3.75% range, while investors closely watch comments from Federal Reserve Chair Kevin Warsh regarding inflation, unemployment, and the economic outlook.

All eyes are on Warshs press conference, guidance, and forecasts for the markets, said Thomas Hayes, chairman of Great Hill Capital.

He added: But with the US-Iran agreement appearing close to completion, that gives him more room to strike a balanced tone.

Hayes also noted that markets often experience heightened volatility during the first year of a new Federal Reserve chair.

Inflation remains more than one percentage point above the Feds 2% target, making Warshs assessment of inflation trends and the timing of any moderation a key factor for future monetary policy.

According to the CME FedWatch Tool, traders currently assign a 42% probability to a 25-basis-point rate hike in December, while markets are not pricing in any rate cuts before mid-2027.

By 9:42 a.m. ET, the Dow Jones Industrial Average was up 360.77 points, or 0.70%, at 52,031.80. The SP 500 gained 0.10% to 7,561.78, while the Nasdaq Composite rose 0.13% to 26,719.01.

The SP 500 also moved closer to the record highs reached in early June following a previous pullback driven by concerns over elevated technology stock valuations and the US-Iran conflict.

Among individual stocks, Qualcomm gained 3.6% after a report indicated the company is in talks to acquire AI chipmaker Tenstorrent for between $8 billion and $10 billion.

Robinhood rose 1.1% after the trading platform announced plans to cut 10% of its full-time workforce and eliminate its remaining open positions.

Market breadth remained positive, with advancing stocks outnumbering decliners by a ratio of 2.19-to-1 on the New York Stock Exchange and 1.39-to-1 on Nasdaq.

The SP 500 recorded 12 new 52-week highs and no new lows, while the Nasdaq Composite registered 46 new highs against 31 new lows.