Record High, Hawkish Shadow: Nasdaq 100 Climbs as Iran Deal Fuels Pre-Fed Rally

Nasdaq 100 hits new high after Iran deal cuts oil prices; SpaceX debuts with record $2T market cap; Fed holds rates but inflation remains sticky.

The Nasdaq 100 closed Monday at a fresh all-time high of 30,543 points, buoyed by a diplomatic breakthrough that sent oil prices tumbling and lifted the most rate-sensitive corners of the market. The rally adds an extra layer of suspense to Wednesday’s Federal Reserve decision, where newly installed Chair Kevin Warsh will deliver his first policy statement under a cloud of stubborn inflation and shifting rate expectations.

The catalyst for the surge was a surprise agreement between the US and Iran to reopen the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of the world’s crude oil flows daily. US crude futures dropped more than 5%, with West Texas Intermediate settling near $80.37 a barrel. The decline in energy costs eased inflation fears that have weighed on tech valuations for months, prompting a broad-based rotation into growth stocks. Airlines and cruise operators led the charge — United Airlines and Royal Caribbean both posted sharp gains — while semiconductor heavyweights Nvidia and Advanced Micro Devices also climbed notably.

In the bond market, the yield on the 10-year US Treasury note slipped to 4.46%, further supporting the case for high-duration equities. The Nasdaq 100 now boasts a year-to-date gain of roughly 21%, but the index’s RSI of 61 and its position well above the 50-day moving average of 28,686 points signal that the rally is technically stretched heading into this week’s policy event.

SpaceX Makes History, Fox Takes a Beating

Monopoliing the corporate spotlight was SpaceX, which marked the largest initial public offering on record. Shares closed their first full trading day nearly 20% higher at $192.50, vaulting the space exploration company to a market capitalisation exceeding $2 trillion. Trading volumes in the stock surpassed those of Nvidia, Microsoft and Tesla combined, and options on SpaceX shares are set to begin trading Tuesday, which could further amplify liquidity.

Elsewhere, Fox tumbled almost 17% after announcing plans to acquire Roku for $22 billion. Investors balked at the bridge financing required for the deal, fearing the debt load would pressure Fox’s balance sheet.

Fed Decision Looms Large

With the Iran deal behind them, traders are now laser-focused on the Federal Open Market Committee. Warsh, presiding over his first rate-setting meeting, is universally expected to leave the federal funds rate unchanged at 3.50–3.75%. Yet the path ahead is far from clear. Inflation stands at 4.2%, and the previous oil price shock has kept price pressures elevated. Term markets price in an 80% probability of a rate hike by year-end, while the odds of a hike at this week’s meeting stand at 42%, according to fed funds futures.

The Cboe Volatility Index, or VIX, sits at a placid 16 points, suggesting options markets are not bracing for fireworks. But the tone of Warsh’s post-meeting press conference on Wednesday afternoon will be critical. A hawkish lean could pressure the yields of tech giants that dominate the Nasdaq 100, while a neutral stance would leave the door open for a push toward the index’s intraday record of 30,762 points.

Index Rebalancing Adds Another Layer

Regardless of the Fed’s message, a structural shift is coming next Monday. The Nasdaq 100’s quarterly rebalancing will usher in three new additions: Astera Labs, CoreWeave and Rocket Lab. In anticipation, investors have been accumulating shares of the incoming members. Nebius, another future constituent, surged 12% after a hedge fund took a stake, and Astera Labs also rallied ahead of the index change.

The convergence of geopolitics, corporate milestones and monetary policy makes this a pivotal week for the benchmark. The rally has momentum, but the Fed’s roadmap will determine whether it can hold above 30,500 — or whether profit-taking awaits.