Dow Jones Industrial Average Rises 0.6% to New Record

The dow jones industrial average rose 0.6% to a new record on Tuesday as Fed officials began their June meeting and traders shifted attention to Kevin Warsh’s first meeting as chair. The move left the S&P 500 down 0.6% and the Nasdaq Composite off 1.1%, a split that showed how quickly money rotated toward policy risk.

Kevin Warsh's first meeting

Fed officials began their June meeting on Tuesday, and the Federal Reserve was scheduled to announce its rate decision on Wednesday. The central bank was widely expected to hold rates steady, but many on Wall Street expected a shift toward hikes in policymakers’ dot plot this year, keeping the focus on how the Fed framed the path ahead.

Wall Street was also trading against fading hopes for a swift reopening of the Strait of Hormuz, after U.S. officials said commercial traffic would reopen without tolls by Friday. President Trump said on Monday in France that “the strait is already partially opened,” then said on Tuesday that “ships are starting to move,” while a senior U.S. official said the return to prewar traffic would happen “definitely within 30 days.”

SpaceX and Western Digital

SpaceX shares rose 8% in afternoon trading for a third day after their public debut last week, lifting the company to a $2.74 trillion valuation and briefly past Amazon during the session. For investors in the stock, that meant the first week of trading was still being driven by demand rather than valuation restraint.

Western Digital stock jumped 7% after Morgan Stanley raised its price target to $650 from $488 and kept an Overweight rating. The firm was among thirty S&P 500 stocks that closed at record highs on Monday, while Micron, Sandisk, and AMD retreated from all-time highs on Tuesday, a sign that the semiconductor complex was not moving in one direction even as the Dow pushed higher.

Policy risk into Wednesday

The mixed session came after recent inflation reports ran hot amid the war and energy prices surged, leaving the Fed meeting to set the tone for the rest of the week. If policymakers keep rates unchanged and signal a tougher dot plot, the Dow’s record may look less like a broad market rally and more like a narrow bet on how long policy can stay patient.