All three major U.S. indexes hit record highs; oil prices retreat
Just after midnight Beijing time on May 28, U.S. stocks closed higher on Wednesday, with all three major indexes hitting record highs. Micron Technology extended its strong rally, while oil prices fell on hopes of a U.S.-Iran ceasefire.
The Dow rose 182.60 points, or 0.36%, to 50,644.28; the Nasdaq gained 18.55 points, or 0.07%, to 26,674.73; and the S&P 500 added 1.24 points, or 0.02%, to 7,520.36.
Lower oil prices helped support sentiment. According to reports, U.S. crude futures fell more than 5% to around $88 a barrel after Iranian state television said the country had promised to restore commercial passage through the Strait of Hormuz to prewar levels within a month.
However, the White House denied the Iranian state media report, calling it “completely fabricated.”
Micron Technology closed up 3.6% on Wednesday. The stock had surged 19% the previous day after an upbeat UBS report, lifting its market value above $1 trillion for the first time.
UBS said the stock still had more than 100% upside as memory suppliers sign long-term deals to support AI deployment. Investors have turned to memory-chip makers as their preferred way to play the AI boom. Micron's South Korean peer SK Hynix also crossed the $1 trillion market-cap mark overnight.
Tech gains pushed the broader market indexes and the tech-heavy Nasdaq to fresh intraday and closing highs in the previous session. The S&P 500 rose 0.61% on Tuesday, and the Nasdaq jumped 1.19%. By contrast, the blue-chip 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 a “self-defense” strike in southern Iran early Tuesday, Central Command spokesman Tim Hawkins said the U.S. showed restraint during the “ongoing ceasefire” between the two sides.
Expectations that tensions with Iran may ease, combined with a strong earnings season, have helped drive this month's record market run. But Citigroup U.S. equity strategist Drew Pettit believes there is limited room for stocks to keep rising.
“Yields are high right now, the U.S. 10-year Treasury yield is around 4.50%, inflation expectations are rising, and the yield curve has actually flattened this year,” he said on CNBC on Tuesday afternoon. “None of that supports the current sustainable higher valuation multiple.”
Pettit's year-end target for the S&P 500 is 7,700, implying only a modest 2% upside.
Goldman Sachs took a different view. Late Tuesday, the bank raised its year-end S&P 500 target from 7,600 to 8,000, saying earnings growth should remain strong despite some geopolitical headwinds.
