The three major U.S. indexes hit record highs again, as tech stocks and oil moved in opposite directions
At the start of trading on May 28 Beijing time, U.S. stocks closed higher on Wednesday, with all three major indexes hitting record highs. Micron Technology continued to post strong gains, while oil prices fell on hopes for a U.S.-Iran ceasefire.
The Dow rose 182.60 points, or 0.36%, to 50,644.28; the Nasdaq rose 18.55 points, or 0.07%, to 26,674.73; and the S&P 500 rose 1.24 points, or 0.02%, to 7,520.36.
Lower oil prices helped support the market. Reports said U.S. crude futures fell more than 5% to around $88 a barrel after Iran's state television said the country had promised to restore commercial traffic through the Strait of Hormuz to prewar levels within a month. The White House later denied the report from Iranian state media, calling it “completely fabricated.”
Micron Technology closed up 3.6% on Wednesday. The stock jumped 19% the day before after an upbeat report from UBS, pushing its market value above $1 trillion for the first time. UBS said the stock still has more than double the upside as memory suppliers sign long-term agreements to support AI deployment. Investors also see memory chip makers as a preferred way to participate in the AI bull market, and Micron's Korean peer SK Hynix also reached a $1 trillion market cap overnight.
Gains in the technology sector pushed the Nasdaq to new intraday and closing highs in the previous session. The S&P 500 rose 0.61% on Tuesday, the Nasdaq jumped 1.19%, while the Dow Jones Industrial Average fell 118.02 points, or 0.23%.
Investors were also encouraged by comments from U.S. President Trump, who said talks to end the war with Iran were “going well.” Although the U.S. carried out “self-defense” strikes in southern Iran early Tuesday, Central Command spokesman Tim Hawkins said the U.S. had remained restrained during the “ongoing ceasefire” between the two countries.
Expectations that tensions with Iran would ease, together with a strong earnings season, drove the stock market to records this month. But Citi U.S. equity strategist Drew Pettit believes there is limited room for further gains. He said yields are high, with the 10-year Treasury yield around 4.50%, inflation expectations are rising, and the yield curve has actually flattened this year, none of which supports today's sustainably higher valuation multiples. Pettit's year-end target for the S&P 500 is 7,700, implying only a modest 2% upside.
Goldman Sachs sees it differently. Late Tuesday, the bank raised its year-end S&P 500 target from 7,600 to 8,000, citing continued strong earnings growth even in the face of some geopolitical headwinds.
