Nasdaq Hits Fresh Record as AI Chip Rally Powers Wall Street

US markets closed Tuesday’s session with mixed performance, although both the S&P 500 and Nasdaq Composite managed to reach new all-time highs, supported by strong momentum in semiconductor and technology stocks as investors continued balancing optimism around artificial intelligence with ongoing geopolitical uncertainty in the Middle East.

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

Chipmakers once again led the rally on Wall Street after shares of Micron Technology soared 19% in one of the company’s strongest trading sessions in years. Investors reacted positively to expectations of accelerating AI-related demand and stronger long-term growth across the semiconductor industry.

The broader AI trade also continued attracting fresh capital. Shares of Dell Technologies climbed more than 3%, extending gains after last week’s sharp rally as investors continued betting on rising demand for servers, cloud infrastructure, and AI computing capacity.

However, gains across mega-cap technology stocks were uneven. Shares of NVIDIA closed slightly lower by 0.2% despite early session gains, while performance among the so-called “Magnificent Seven” remained mixed amid modest profit-taking near record highs.

Outside the technology sector, AutoZone came under heavy pressure after its shares plunged nearly 9% following weaker-than-expected quarterly earnings and sales results, making it one of the worst performers in the S&P 500.

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

US West Texas Intermediate crude futures dropped roughly 3% to trade below $94 per barrel after US President Donald Trump stated that peace negotiations were “going very well.” However, geopolitical concerns quickly resurfaced after US forces reportedly targeted two Iranian vessels accused of attempting to plant mines in the Strait of Hormuz. The developments pushed Brent crude higher by more than 3.5%, sending prices back 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% seen late last week. Lower yields tend to improve valuations for high-growth technology companies by easing pressure on future earnings expectations.

In precious metals, gold eased 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 overnight. Traders continued monitoring global liquidity conditions and geopolitical risk sentiment for direction.

Analysts noted that markets remain highly sensitive to both macroeconomic and geopolitical developments. Dean Chen of Bitunix stated that cryptocurrency performance is likely to remain closely linked to liquidity conditions and investor risk appetite until broader economic uncertainty begins to ease.

Market Outlook

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

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

Oil markets could remain extremely volatile as traders react to every headline tied to the Strait of Hormuz and Middle East negotiations, while Bitcoin and broader cryptocurrency markets are expected to remain highly sensitive to shifts in liquidity expectations and overall risk appetite.