AI-Led Equity Rally Drives US Markets to Record Highs Amid Middle East Tensions

index Update

US stocks climbed to fresh record highs on Tuesday, with the S&P 500 closing above 7,600 for the first time and the Dow rising over 200 points, as strong momentum in AI and semiconductor stocks outweighed US-Iran uncertainty. Chipmakers and AI infrastructure names rallied sharply, led by HPE’s AI-driven guidance upgrade, Marvell’s surge after positive comments from Nvidia’s CEO, and gains across Broadcom, Lam Research, Qualcomm, and ON Semiconductor, while Alphabet fell nearly 4% after announcing an $80 billion stock sale to support AI expansion.

Market Movers

Among the top-performing stocks of the session Decent Holding Inc. surged 209.38%, while Laser Photonics Corporation. rallied 160.92%. On the losing side, Fulcrum Therapeutics, Inc. fell 51.09%, while Virgin Galactic Holdings, Inc. declined 38.96%, making them the weakest performers during the trading day.

Commodities Update

WTI and Brent Crude futures extended gains for a third straight session, rising above $95 and $97 per barrel respectively, as escalating Middle East tensions and uncertainty over US-Iran peace negotiations supported a geopolitical risk premium, while a sharp 6.8 million-barrel decline in US crude inventories further strengthened market sentiment. In contrast, gold and silver prices weakened, with gold slipping below $4,500 per ounce and silver falling near $74 per ounce, as stronger US labor market data reinforced expectations that the Federal Reserve may keep interest rates elevated for longer, reducing the appeal of non-yielding precious metals despite ongoing geopolitical uncertainty.

Macro Updates

Dollar Holds Firm on Safe-Haven Demand

The dollar index hovered near 99.2 as Middle East tensions and stalled US-Iran peace talks supported safe-haven demand, while elevated energy prices raised Inflation concerns and reinforced expectations of higher-for-longer interest rates. Strong US Job Openings data further backed this outlook, with investors now awaiting private payrolls and Friday’s nonfarm payrolls report for clearer signals on the Federal Reserve’s policy path.

US Crude Stockpiles Extend Sharp Drawdown

US crude inventories declined by 6.8 million barrels for the week ended May 29, 2026, marking the seventh consecutive weekly draw and coming in well above expectations for a 3.6 million-barrel drop. Meanwhile, gasoline inventories increased by 3.5 million barrels, while distillate stocks slipped by 214,000 barrels, indicating a sharper-than-expected tightening in crude Supply alongside mixed trends in refined fuel inventories.

Bonds Commentary

The 10-year US Treasury Yield held steady near 4.45% as investors remained cautious amid Middle East tensions, stalled US-Iran negotiations, and rising energy-price-driven inflation concerns. Strong US labor data further supported expectations that the Federal Reserve may keep rates higher for longer, with markets now awaiting private payrolls and Friday’s nonfarm payrolls report for clearer policy signals.

Futures Update

US stock futures were broadly unchanged after the Dow, S&P 500, and Nasdaq closed at fresh record highs, supported by broad sector gains led by utilities, materials, and industrials. Technology and AI-linked stocks remained in focus, with Hewlett Packard Enterprise and Marvell Technology rallying sharply on strong AI demand and positive industry commentary, while investors continued to watch mixed signals from US-Iran peace negotiations amid elevated geopolitical uncertainty.

Despite a cautious start to the session, Wall Street rebounded to finish modestly higher on Tuesday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all securing fresh record closing highs for a third consecutive day. The S&P 500 continues to exhibit a strong bullish intraday structure, ending near 7,610 and holding comfortably above its 21-day EMA (7,427) and 50-day EMA (7,218). The widening gap between these key moving averages underscores the strength of the prevailing uptrend, while the ongoing pattern of higher highs and higher lows highlights continued institutional accumulation. Momentum remains robust, with the RSI around 75, indicating strong buying pressure even as the market approaches overbought levels. If bullish momentum persists, the index may target the 7,650–7,700 resistance zone, while 7,500–7,430 remains the key support area to watch for trend continuation.