Wall Street hits new closing highs on tech strength, Middle East deal hopes

NEW YORK, May 29 (Reuters) – Wall Street‘s main indexes hit record closing highs on Friday and posted weekly and monthly gains as Dell results drove tech shares higher, while investors awaited details on a potential U.S.-Iran deal.

President Donald Trump said in a social media post that he would make a final decision on the Iran deal on Friday. Tehran earlier said it was looking for action, not words, when it came to an agreement.

Dell surged after raising its full-year profit and revenue forecasts on Thursday. The tech sector climbed, fueled by gains in chip stocks.

Peers Hewlett Packard Enterprise and Super Micro Computer gained. Microsoft climbed.

The software services index also advanced.

Earlier in the session, all three indexes hit intraday record highs, cruising on renewed optimism around AI and strong earnings growth, despite concerns about the Iran war’s impact on inflation and the global economy.

According to preliminary data, the S&P 500 gained 16.11 points, or 0.21%, to end at 7,579.74 points, while the Nasdaq Composite gained 53.74 points, or 0.20%, to 26,971.21. The Dow Jones Industrial Average rose 363.48 points, or 0.72%, to 51,032.45.

EARNINGS-DRIVEN RALLY

“There’s definitely euphoric sentiment in the market around AI. The rally has really been driven by earnings,” said Ohsung Kwon, chief equity strategist at Wells Fargo.

He suggested investors buy and hold AI stocks, then earn extra income by selling call options at prices much higher than the current stock price.

Melissa Brown, head of investment decision research at SimCorp, said over the past few weeks volume has gone up, which suggests more people are coming into the market.

The S&P 500 was on track for a ninth consecutive weekly gain, its longest winning streak since December 2023.

The S&P 500 communications services sector dropped, as Alphabet declined.

Consumer staples shares were weak with heavyweights Costco and Walmart both down.

The S&P automaker index dropped after reports the Trump administration wants North American-built vehicles to have 82% regional content to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement.

Shares of General Motors and U.S.-listed shares of Stellantis fell.

U.S. economic data on Thursday showed inflation increased at its fastest pace in three years in April, while GDP for the first quarter was revised lower to a 1.6% annual rise.

The Fed’s Kansas City President Jeffrey Schmid warned the energy shock may not be temporary. Vice Chair for Supervision Michelle Bowman said a persistent rise in inflation might require tighter monetary policy.

Money markets expect the Federal Reserve to keep interest rates steady for the rest of the year, with expectations of a 25-basis-point hike in December.

Among other movers, Gap shares tumbled after the apparel retailer cut its annual sales forecast, while American Eagle Outfitters dropped after keeping its annual comparable sales forecast unchanged.

(Reporting by Twesha Dikshit and Utkarsh Hathi and Saeed Azhar in New York; Editing by Joyjeet Das, Devika Syamnath, Rod Nickel)