Wall Street Reaches New Closing Peaks on Tech Sector Advancements and Middle East Diplomatic Developments

Market Rallies as Dell Results Drive Tech Shares Higher

The Wall Street indexes hit record closing highs on Friday, posting weekly and monthly gains as investors awaited details on a potential U.S.-Iran deal. Dell surged 32.8% after raising its full-year profit and revenue forecasts on Thursday, fueling a 1.87% climb in the tech sector.

The sector's gains were led by chip stocks, with peers Hewlett Packard Enterprise and Super Micro Computer gaining 12.6% and 11.6% respectively. Microsoft climbed 5.4%, driving the software services index up by over 6% and erasing all losses since January-end.

The Dow Jones Industrial Average rose 363.37 points, or 0.72%, to 51,032.34, while the S&P 500 gained 16.44 points, or 0.22%, to 7,580.07. The Nasdaq Composite gained 55.15 points, or 0.21%, to 26,972.62. The small-cap Russell 2000 index was down 0.6%.

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The S&P 500 registered its ninth consecutive weekly gain, its longest winning streak since December 2023. The Russell 2000 index rose 1.72% for the week and 4.24% for the month, since April 30.

Investors are awaiting details on a potential U.S.-Iran deal, with President Donald Trump saying he would make a final decision on Friday. Tehran earlier said it was looking for action, not words, when it came to an agreement.

The S&P 500 communications services sector dropped, as Alphabet declined by 2.5%. Consumer staples shares were weak, with heavyweights Costco and Walmart down 3.9% and 2.6% respectively. 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.

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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 15.4% after the apparel retailer cut its annual sales forecast, while American Eagle Outfitters dropped 11.8% after keeping its annual comparable sales forecast unchanged.

Declining issues outnumbered advancers by a 1.04-to-1 ratio on the NYSE, with 491 new highs and 102 new lows. On the Nasdaq, 2,378 stocks rose and 2,486 fell as declining issues outnumbered advancers by a 1.05-to-1 ratio. The S&P 500 posted 27 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 125 new highs and 54 new lows.

Volume on U.S. exchanges was 23.9 billion shares, compared with the 19.36 billion average for the full session over the last 20 trading days.