Fed Rate Decision, SpaceX IPO, and U.S.-Iran Deal: What Markets Are Watching This Week

TLDR

• The U.S. and Iran have reached an interim peace deal, set to be signed Friday in Switzerland
• SpaceX debuted at $150/share, hitting a $2.1 trillion market cap — the largest IPO in history
• New Fed Chair Kevin Warsh chairs his first FOMC meeting Wednesday; rates expected to hold
• Inflation hit a three-year high in May, complicating the Fed’s next move
• Anthropic staff are set to meet White House officials over its advanced AI models being taken offline

The U.S. and Iran have agreed to an interim peace deal that could end more than three months of conflict. The agreement is set to be signed in Switzerland on Friday. Pakistani Prime Minister Shehbaz Sharif confirmed both nations have declared an immediate end to military operations on all fronts, including Lebanon.

President Trump said the deal would reopen the Strait of Hormuz, a key oil shipping route. Around a fifth of the world’s oil passed through the strait before the war began in late February. Trump said a brief delay is due to mine-clearing operations, with the waterway expected to reopen Friday.

Oil prices dropped on the news. Global stocks rallied. But some analysts warn that a full recovery in energy markets will take time. Rystad Energy estimates the conflict has already wiped out one billion barrels of oil supply, with that number on track to nearly double by year-end.

Fed Chair Warsh Takes Center Stage

Wednesday marks new Fed Chair Kevin Warsh’s first Federal Open Market Committee meeting since being sworn in on May 22. Markets widely expect rates to stay on hold.

Inflation is running hot. Consumer prices in May rose at their fastest pace since 2023. Producer prices hit their highest rate since November 2022. Hiring has also come in above expectations for several months in a row.

Warsh has previously said the Fed should avoid being too specific with forward guidance. That approach could make markets more sensitive to new economic data going forward.

President Trump has pushed for rate cuts. But analysts say current conditions look very different from the last time the Fed cut rates. Some strategists have flagged that AI investment may be adding to short-term inflation, complicating the picture further.

Analysts at Vital Knowledge say the Fed’s easing bias will likely be removed from Wednesday’s statement. They add that Warsh could still strike a dovish tone at his press conference if he links future rate cuts to a resolved Iran situation.

SpaceX Makes History

SpaceX went public on the Nasdaq last Friday, opening at $150 per share. That was an 11% premium over its $135 IPO price. Shares gained roughly 20% through the session.

The company’s market cap hit around $2.1 trillion, making it one of the most valuable publicly listed firms in the U.S. The IPO raised more money than any public offering in history. Elon Musk became the first trillionaire of the modern era as a result.

Retail investors bought $117.6 million worth of shares on the first day alone. Analysts have flagged potential volatility ahead due to SpaceX’s small float and high valuation.

Musk said Sunday that SpaceX could eventually generate $1 trillion in annual revenue by 2030. The company brought in $18.7 billion in 2025.

SpaceX’s IPO may also signal strong investor appetite for other big tech listings. Anthropic, the AI startup behind Claude, recently filed for an IPO confidentially. Senior Anthropic staff are due to meet White House officials this week. The talks aim to resolve a dispute that forced the company to take its most advanced AI models offline globally.

The Bank of Japan is also expected to raise rates to a more than three-decade high on Monday night, while the Bank of England is seen holding steady at 3.75% on Thursday.

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