US Stocks Rise Amid Hopes for US-Iran Diplomatic Progress and Increased AI Investment

US Stocks Edge Higher on Friday Amid Optimism Over Iran Deal and AI Spending

US stocks edged higher in early trading on Friday, driven by hopes of a peace deal between the US and Iran and expectations that spending on artificial intelligence will drive further gains in corporate earnings. The S&P 500 Index opened 0.2% higher, on track for its ninth straight week of gains, a streak that has only been matched four times since 1985.

The tech-heavy Nasdaq 100 Index rose 0.3%, while the Dow Jones Industrial Average climbed 0.1%. Crude oil prices dropped, with West Texas Intermediate falling to around $87 a barrel as the US and Iran reached a preliminary deal to extend the ceasefire by another 60 days, though President Donald Trump has yet to agree to terms.

Optimism surrounding a potential resolution to the war with Iran has improved investor sentiment, with risk appetite remaining firmly intact. Strong corporate earnings have also played a critical role in sustaining momentum. Enthusiasm over AI continues to propel stocks higher, with Dell Technologies Inc. shares soaring more than 30% after the hardware maker raised its sales outlook well above Wall Street's consensus view, thanks in large part to $60 billion in expected revenue from AI servers.

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The gains helped boost a handful of peers, including Hewlett Packard Enterprise and Super Micro Computer. A 50% year-over-year increase in revenues is not deemed cyclical, and the company's shares have already climbed around 160% since its last earnings release in February, even before Friday's sharp jump.

A handful of Federal Reserve officials also provided optimistic views of the economy and the interest rate path. San Francisco Fed President Mary Daly said the central bank's rate policy is "in a good place" and she's "cautiously optimistic" about the economy. Minneapolis Fed President Neel Kashkari said it's too early to conclude that interest rates need to rise.

Traders also parsed a narrowing of the US merchandise-trade deficit as exports rose. Retail inventories, meanwhile, rose slightly faster than expected. Other notable single-stock movers Friday include Costco, which slipped after the wholesaler's moderating membership growth raised concerns on Wall Street. Gap shares are falling after the company's Old Navy brand weighed on its full-year outlook.

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