CNBC and Market Watch contributed to this report.
US stocks opened Tuesday on a strong note, with the S&P 500 and Nasdaq Composite both hitting fresh intraday records as tech shares led the charge and investors watched closely for any sign of progress in shaky US-Iran talks.
The S&P 500 was up 0.6% in early trade, while the Nasdaq climbed 1.1%. The Dow Jones Industrial Average hovered near flat. Markets were back from Monday’s Memorial Day break, and traders came in with plenty to chew on: rising chip stocks, fresh geopolitical tension, and a market that has been surprisingly resilient.
Micron Technology was the standout. The stock surged 17% and pushed past a $1 trillion market value for the first time, after UBS sharply raised its price target and said the chipmaker could still have more than 100% upside. The rally spilled over into the rest of the memory space, with Seagate Technology up 3% and Western Digital gaining 8%. The Roundhill Memory ETF jumped 12%.
The broader mood was helped by hopes that the conflict between the US and Iran may be headed toward some kind of deal. President Donald Trump said Monday that negotiations were “proceeding nicely,” though he also warned that the US could go back on the offensive if talks collapse.
That optimism got a reality check early Tuesday. The US said it carried out “self defense” strikes in southern Iran, targeting missile launch sites and Iranian boats allegedly trying to lay mines, according to US Central Command. Oil markets reacted fast. West Texas Intermediate futures slipped 2% to around $93 a barrel, while Brent was up 4% at about $100.
Still, some on Wall Street think the market has room to keep running. Adam Crisafulli of Vital Knowledge said the big question is how much of a deal is already priced in. Adam Parker of Trivariate Research pointed to earnings strength as another reason stocks have held up, noting that profits are still expected to grow strongly this year and next.
The latest stretch has already been solid. Last week, the S&P 500 rose 0.9% for its longest weekly winning streak since late 2023, the Dow gained 2.1%, and the Nasdaq added 0.5%.
One corner of the market that had been especially sensitive to the war in Iran was oil, and prices did ease last week as well. US crude fell 8.4% for its worst week since mid-April. Even so, oil remains elevated enough to keep inflation worries alive, which is one reason rate-cut hopes have cooled. Traders are now pricing in a small chance of a July rate hike, according to CME’s FedWatch tool.
There were signs elsewhere that consumers are feeling the pressure. The Conference Board said Tuesday that US consumer confidence slipped in May as inflation concerns tied to the Middle East conflict weighed on sentiment.
For now, though, the market’s message is pretty clear: tech is back in front, chip stocks are hot, and investors are still willing to buy the dip while they wait to see whether diplomacy holds.
The latest news in your social feeds
Subscribe to our social media platforms to stay tuned