US stocks closed at record highs on Friday, capping a strong month for Wall Street as technology shares rallied on renewed optimism surrounding artificial intelligence and easing concerns over geopolitical tensions in the Middle East.
The Nasdaq Composite rose 0.2% to close at 26,972.62, while the S&P 500 gained 0.22% to finish at 7,580.06.
The Dow Jones Industrial Average climbed 363.49 points, or 0.72%, ending the session at 51,032.46.
All three indices also touched fresh intraday record highs earlier in the session.
The gains helped the major averages secure strong monthly advances.
The Nasdaq led the rally with a gain of more than 8% in May, while the S&P 500 climbed 5% and the Dow advanced nearly 3%.
Weekly gains were also solid across the board, with the Nasdaq rising more than 2%, the S&P 500 up over 1%, and the Dow adding slightly less than 1%.
Dell earnings fuel AI-driven tech rally
Technology stocks drove much of Friday’s gains after Dell Technologies delivered stronger-than-expected quarterly earnings and raised its full-year outlook.
Dell shares surged nearly 33%, marking the strongest single-day gain in the company’s history.
The rally spilled over into other technology and semiconductor names tied to AI infrastructure demand.
Micron Technology rose roughly 5%, while Qualcomm gained around 3%.
Both stocks posted strong monthly gains despite experiencing volatility earlier in May.
Micron surged nearly 88% during the month, while Qualcomm advanced close to 40%.
The Technology Select Sector SPDR Fund climbed nearly 20% during May and hit a fresh 52-week high on Friday.
Software stocks also moved higher after Snowflake’s recent earnings results reinforced optimism surrounding AI-related enterprise spending.
Markets monitor Iran ceasefire discussions
Investor sentiment was also supported by developments surrounding negotiations between the United States and Iran.
Markets continued reacting to reports that the two countries had agreed to a 60-day memorandum of understanding aimed at extending the ceasefire and reopening shipping through the Strait of Hormuz.
President Donald Trump said Friday he would make a final decision on the Iran agreement later in the day.
In a Truth Social post, Trump said he was meeting in the Situation Room “to make a final determination” and added that Iran “must agree that they will never have a Nuclear Weapon.” He also stated that the Strait of Hormuz must be “immediately open.”
The prospect of easing tensions helped oil prices decline.
West Texas Intermediate crude futures fell 1.73% to settle at $87.36 per barrel, while Brent crude dropped 1.77% to close at $92.05.
Inflation and Fed outlook remain in focus
Despite the strong rally, investors continued assessing economic data and the outlook for monetary policy.
Recent US data showed inflation accelerated at its fastest pace in three years during April, while first-quarter GDP growth was revised lower to an annualized rate of 1.6%.
Federal Reserve officials also warned that inflation pressures tied to higher energy prices could persist.
Kansas City Fed President Jeffrey Schmid cautioned that the latest energy shock may not be temporary, while Fed Vice Chair for Supervision Michelle Bowman said persistent inflation could require tighter monetary policy.
Money markets currently expect the Federal Reserve to leave interest rates unchanged for most of the year, though traders continue pricing in the possibility of a 25-basis-point hike in December.
Outside technology, several sectors lagged.
The communications services sector declined as Alphabet shares fell, while consumer staples weakened after declines in Costco and Walmart.
Automaker stocks also came under pressure following reports that the Trump administration wants North American-built vehicles to contain 82% regional content to qualify for preferential treatment under the US-Mexico-Canada Agreement.
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