Stocks reached new all-time highs on Friday, capping a strong May for Wall Street. The Dow Jones Industrial Average closed above 51,000 for the first time, rising 0.7% to 51,032.46. The S&P 500 gained 0.2% to end at 7,580.06, while the Nasdaq Composite added 0.2% to 26,972.62. All three major indexes posted record closes.
The rally was led by a massive surge in Dell Technologies (DELL), whose shares jumped 32.8% after the company reported better-than-expected quarterly results and raised its full-year profit and revenue outlooks. Dell posted adjusted earnings of $4.86 per share on revenue of $43.8 billion, driven by a more than 750% year-over-year increase in sales of AI-optimized servers. Chief Operating Officer Jeff Clarke said the company's record first-quarter performance reflected strong demand and that the AI opportunity shows no signs of slowing.
The strong results lifted the broader tech sector. Hewlett Packard Enterprise (HPE) rose 12.6%, Super Micro Computer (SMCI) gained 11.6%, and Microsoft (MSFT) added 5.4%. The S&P 500 technology sector advanced 1.87%, while the software services index surged more than 6%, erasing earlier losses tied to AI disruption fears. The AI trade has expanded beyond chipmakers into servers, storage, and corporate computing hardware.
Oil prices fell, providing some relief from inflation concerns. Brent crude dropped 1.7% to $91.12 a barrel for August delivery, and U.S. crude for July lost 1.7% to $87.36. The decline came after U.S. and Iranian negotiators reached a tentative agreement to extend the current ceasefire for 60 days and resume nuclear talks. President Donald Trump said he would make a final decision on Friday. Despite the drop, oil prices remain well above pre-conflict levels near $70.
The S&P 500 finished its ninth consecutive weekly gain, the longest winning streak since 2023. For May, the Nasdaq climbed about 8%, while the S&P 500 added 5%. The market has largely shrugged off geopolitical headlines and choppy energy trading, focusing instead on strong corporate earnings and AI-driven growth. According to FactSet, S&P 500 companies have posted 28% earnings growth for the latest quarter.
However, the rally was not universal. Small-cap stocks lagged, with the Russell 2000 slipping 0.6%, as investors continued to favor large-cap names tied to AI and software. Among decliners, Alphabet (GOOGL) fell 2.5%, Costco (COST) dropped 3.9%, and Walmart (WMT) declined 2.6%. Gap (GPS) sank 15.4% after lowering its annual sales outlook, and American Eagle Outfitters (AEO) fell 11.8%.
Looking ahead, market focus is expected to shift back to inflation data, consumer trends, and Federal Reserve policy. Money markets currently price in no rate cuts through the end of the year, with a possible quarter-point hike in December. Fed officials have indicated that the energy shock may not be short-lived, keeping inflation risks elevated. If the Iran ceasefire talks break down, investors could face higher oil prices, weaker growth, and renewed inflationary pressure—the same mix that weighed on markets earlier this spring.
