US Stock Market Today Highlights: Wall Street ends mixed; S&P 500, Nasdaq hit record closing highs

US stock market ended mixed on Tuesday, with the S&P 500 and Nasdaq hitting record closing highs, led by a rally in semiconductor stocks amid AI-fueled optimism.

The Dow Jones Industrial Average fell 118.02 points, or 0.23%, to 50,461.68, while the S&P 500 gained 45.65 points, or 0.61%, to 7,519.12. The Nasdaq Composite closed 312.21 points, or 1.19%, higher at 26,656.18.

Nvidia stock price declined 0.22%, AMD shares jumped 7.78%, Intel share price rallied 3.07%, Micron Technology shares surged 19.29%, Qualcomm shares gained 4.48%, Microsoft shares fell 0.61%, Apple stock price dropped 0.16% and Tesla stock price rose 1.78%.

Expectations of an agreement drove the S&P 500 toward a record, with chipmakers leading the charge.

Treasury yields fell as concerns over a flare-up in inflation eased, making traders pare back their wagers on near-term Federal Reserve rate hikes.

Oil continued to whipsaw on Middle East developments, with Brent topping $100 after slumping more than 7% on Monday.

President Donald Trump said negotiations with Tehran to extend their ceasefire and reopen the Strait of Hormuz are proceeding, though Secretary of State Marco Rubio added that a deal would likely take a few days to finalize.

US and Iranian forces clashed near the waterway overnight, highlighting the tension between the two sides. The US Navy has restarted assisting vessel crossings through Hormuz, the Wall Street Journal reported.

The S&P 500 and the Nasdaq traded near record highs on Tuesday, with AI-fueled optimism offsetting concerns over Middle East peace talks after recent US strikes on Iran.

US Secretary of State Marco Rubio said that the deal with Tehran could "take a few days," while Iran's Tasnim news agency reported that Tehran was seeking the release of $24 billion of Iranian funds frozen overseas.

Upbeat earnings and renewed confidence in AI trade have driven U.S. equities higher despite the ongoing conflict with Iran, with investors now turning their attention to IPOs of some of the largest private AI companies, including SpaceX.

A survey showed U.S. consumer confidence eased in May as worries about higher prices linked to the Iran war intensified, offsetting an improvement in labor market perceptions.

Brent crude oil futures traded around $99 per barrel on Tuesday, near a five-week low, as markets balanced optimism over ongoing US-Iran negotiations against renewed military operations in southern Iran.

Reports said the US military targeted missile launch sites and vessels suspected of preparing to deploy mines, with US Central Command stating the actions were intended to protect American forces in the region.

At the same time, President Donald Trump said discussions with Tehran were progressing positively but warned that further strikes could follow if talks collapse.

Shares of Micron Technology climbed about 14.2% in early trading on Tuesday after brokerage UBS sharply raised its target price for the stock, citing stronger AI demand and long-term supply deals, taking the chipmaker closer to $1 trillion in market value.

The revised target - the highest among the 46 brokerages covering the stock - implies a potential valuation of close to $1.8 trillion for the company by the next twelve months, compared with a market capitalization of $846.93 billion as of close on Friday, Reuters reported.

Although gold and silver were trading higher in Tuesday’s session, 26 May, both precious metals came sharply off their intraday highs as optimism around a potential peace deal in West Asia weakened following fresh US strikes on Iran, while a recovery in the US dollar also weighed on sentiment.

Comex gold gained $60 per troy ounce to touch an intraday high of $4,540, while silver futures rose $3.05 per ounce to $79.25.

While President Donald Trump stated that negotiations to end the three-month war with Iran were “proceeding nicely,” the optimism was heavily checked by reports of fresh US defensive air strikes against Iranian missile sites and boats.

US chip and memory stocks rallied sharply on Wall Street, following gains in artificial intelligence-related names across Hong Kong and South Korea. Micron Technology shares rose 13% to $847 apiece.

Meanwhile, Santa Clara-based Marvell Technology shares jumped 8.2% in premarket trade ahead of the chipmaker’s first-quarter earnings release on Wednesday. SanDisk and Qualcomm also advanced 7% and 1%, respectively.

The rally in chip stocks helped the Nasdaq hit another record high of 26,728.

Chinese chip stocks listed in Hong Kong also gained after a new design approach from Huawei boosted optimism around the capabilities of local suppliers, with the Nasdaq-equivalent Hang Seng Tech Index rising 1.8%. In South Korea, semiconductor stocks pushed the Kospi to an intraday record high.

US equity futures gained and Treasuries rallied as investors remained hopeful that the latest clashes between Iranian and US forces won’t derail talks to end the Middle East conflict. S&P 500 futures rose 0.7%, signaling a stronger open for the US stock market after Monday’s Memorial Day holiday. Nasdaq 100 contracts gained more than 1%.

Investors are largely shrugging off a rebound in Brent crude prices after the US hit Iranian ships and missile launch sites, and Iran’s Tasnim news agency said the Islamic Revolutionary Guard Corps had fired at a US F-35 fighter jet.

Beyond geopolitics and AI, investors are still watching corporate earnings and Federal Reserve signals for clues on whether the rally can continue.

Wall Street’s record highs have been supported by strong earnings, particularly among large technology companies.

But the next leg of the rally may depend on whether profit growth broadens beyond the AI leaders.

The Fed remains another key risk. If oil prices stay elevated, inflation worries could return, limiting the central bank’s room to ease policy.

That could challenge equity valuations, especially in growth sectors where higher rates tend to weigh more heavily.

The futures market suggest investors are preparing for another strong session after major US indices pushed to record levels last week.

Dow Jones Industrial Average futures rose 255 points, or 0.51%. S&P 500 futures climbed 0.7%, while Nasdaq-100 futures advanced 1.1%.

Investors are also assessing the outlook for Federal Reserve policy as elevated oil prices continue to fuel inflation concerns. Market participants increasingly expect that the Fed may need to tighten monetary policy after the Iran conflict triggered the biggest inflation surge since 2023, prompting several officials to move away from their earlier easing bias.

The US Federal Reserve’s latest policy meeting showed that most officials believe a rate hike this year could still be warranted if inflation remains above the central bank’s 2% target.

US President Donald Trump, who has repeatedly pressured the Fed to cut interest rates, said on Friday that he wanted Kevin Warsh to lead the central bank independently. Trump has also been facing growing domestic political pressure to end the conflict, particularly ahead of the November midterm elections that will determine control of Congress.

Semiconductor shares were among the strongest performers before the open as enthusiasm around artificial intelligence continued to drive investor demand. Marvell Technology rose 5.7% in premarket trading, while Micron and Intel gained about 2% each.

Nvidia remains in the spotlight. CEO Jensen Huang has reportedly demanded tighter compliance from supplier Super Micro Computer (SMCI) following fraud arrests in Taiwan

Among early movers, Joyy, jumped 12.3% after the Chinese social live-streaming platform posted first-quarter revenue above expectations.

While hopes of a potential peace deal remain uncertain, crude oil prices rebounded in Tuesday’s trade, with benchmark US crude rising $3.7 to the day’s high of $93.6 per barrel. Brent crude, the international benchmark, was up $3.6 at $97 per barrel after tumbling nearly 10% on Monday amid optimism over the potential reopening of the Strait of Hormuz.

Since the escalation of the conflict in late February, the Strait of Hormuz has effectively remained shut. A full reopening of the waterway would provide significant relief to major Asian economies and could push oil prices substantially lower, considering the route carries roughly one-fifth of global oil and LNG shipments.

The closure of the key maritime route forced several major oil-producing nations in West Asia to halt output, adding further pressure on crude prices, with Brent at one point nearing $120 per barrel.

Dow E-minis were 0.48%, S&P 500 E-minis gained 0.52%, and Nasdaq 100 E-minis rose 0.77%, signalling a positive start for Wall Street.