Nasdaq and S&P 500 Hit New Records as AI Rally Accelerates

US markets ended Tuesday’s session with mixed performance, although the S&P 500 and Nasdaq Composite both closed at fresh record highs as investors continued pouring into semiconductor and artificial intelligence-related stocks despite ongoing geopolitical uncertainty in the Middle East.

The technology-heavy Nasdaq jumped 1.2%, while the S&P 500 gained 0.6%, surpassing their previous record highs set on May 14. Meanwhile, the Dow Jones Industrial Average slipped 0.2%, weighed down by weakness in several large-cap industrial and consumer stocks.

Semiconductor shares led the rally after Micron Technology surged 19% in one of its strongest trading sessions in years. The sharp gains were fueled by growing optimism surrounding AI-driven demand for memory chips and broader expectations of accelerating investment in digital infrastructure.

Investor appetite for AI-related technology names remained strong throughout the session. Shares of Dell Technologies rose more than 3%, extending last week’s 17% rally as markets continued betting on rising demand for AI servers, cloud systems, and enterprise computing infrastructure.

However, gains across mega-cap technology stocks were uneven. Shares of NVIDIA closed marginally lower by 0.2% despite early advances, while several members of the so-called “Magnificent Seven” traded mixed amid limited profit-taking near all-time highs.

Outside the technology sector, AutoZone became one of the session’s biggest losers after its shares plunged nearly 9% following quarterly results that missed analyst expectations on both revenue and earnings.

Energy markets remained volatile as traders reacted to conflicting developments surrounding US-Iran relations and tensions in the Strait of Hormuz.

US West Texas Intermediate crude futures dropped around 3% to trade below $94 per barrel after US President Donald Trump stated that peace talks with Iran were “going very well.” However, geopolitical tensions quickly resurfaced after US forces reportedly struck two Iranian vessels accused of attempting to plant mines in the Strait of Hormuz. The escalation pushed Brent crude higher by more than 3.5%, lifting prices above $99.50 per barrel.

Meanwhile, bond markets provided additional support for growth stocks after the yield on the 10-year US Treasury note fell below 4.50%, retreating from levels above 4.56% at the end of last week. Lower Treasury yields generally improve sentiment toward high-growth technology companies by easing pressure on future earnings valuations.

In precious metals, gold slipped 0.4% but remained elevated above $4,500 per ounce, while the US Dollar Index (DXY) edged slightly lower to 99.16.

Cryptocurrency markets traded cautiously, with Bitcoin falling toward $75,900 after briefly approaching $77,400 during overnight trading. Investors continued monitoring liquidity conditions and geopolitical developments for direction.

Analysts noted that markets remain highly sensitive to both economic and geopolitical headlines, particularly as investors continue assessing the outlook for inflation and US interest rates. Dean Chen of Bitunix stated that cryptocurrency performance is expected to remain closely tied to global liquidity conditions and overall investor risk appetite until broader economic uncertainty eases.

Market Outlook

Global markets are expected to remain driven by two major themes in the near term: developments surrounding the US-Iran situation and upcoming US economic data, particularly inflation and consumer spending figures that could reshape expectations for Federal Reserve policy.

Technology and AI-related stocks are likely to continue attracting strong inflows following the latest semiconductor-led rally, especially if Treasury yields remain under control.

Meanwhile, oil markets may remain highly volatile as traders react to every new headline involving the Strait of Hormuz and Middle East negotiations. Cryptocurrency markets are also expected to remain sensitive to changes in liquidity expectations and broader market risk sentiment.