Wall Street ended Tuesday with the S&P 500 and Nasdaq Composite posting record closes, as enthusiasm for artificial intelligence continued to fuel gains across the semiconductor supply chain. The S&P 500 advanced 0.61% to 7,519.12, while the tech-heavy Nasdaq climbed 1.19% to 26,656.18. In contrast, the Dow Jones Industrial Average slipped 0.23% to 50,461.68, reflecting a narrower rally.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, described this year's tech surge as reminiscent of the late-1990s boom. Adam Sarhan of 50 Park Investments added that easing Middle East tensions appeared to be supporting risk appetite, with markets anticipating a peaceful resolution.
AI Supply Chain Drives Broader Rally
Investor interest extended beyond Nvidia (NVDA) into the broader AI ecosystem, including memory chips, custom semiconductors, servers, and data center infrastructure. This rotation lifted several names in the chip sector, even as oil price risks and inflation concerns lingered.
Micron Technology (MU) briefly surpassed $1 trillion in market capitalization after UBS raised its price target sharply to $1,625 from $535. Art Hogan of B. Riley Wealth noted that Micron sits at the center of AI memory demand, echoing the trajectory of Samsung Electronics (SSNLF) and SK Hynix. Qualcomm (QCOM) surged nearly 5% in regular trading following a Bloomberg report that it had struck a deal to supply custom chips (ASICs) to ByteDance, the parent company of TikTok, for AI data centers.
After-Hours Moves: Zscaler Tumbles, IREN Inks Big Nvidia Deal
After the closing bell, Zscaler (ZS) dropped 15% after forecasting fourth-quarter revenue below analyst expectations. The cybersecurity firm, which operates in the Secure Access Service Edge (SASE) space, faces intensifying competition from Palo Alto Networks (PANW) and others, underscoring that investors are scrutinizing sales growth rather than just AI hype.
In a major capital expenditure move, IREN announced it would purchase Nvidia's air-cooled Blackwell systems from Dell (DELL) for approximately $1.6 billion. The acquisition is part of a broader five-year, $3.4 billion cloud AI services contract with Dell. "Time-to-compute is everything," said IREN Co-CEO Daniel Roberts, highlighting the urgency in AI infrastructure buildout.
Consumer Confidence Dips, Oil Risks Persist
The Conference Board reported that U.S. consumer confidence slipped in May, with the index falling to 93.1 from a revised 93.8 in April. Chief Economist Dana M. Peterson attributed the decline to inflationary pressures linked to the Middle East conflict. About two-thirds of consumers noted they are cutting back on spending due to higher prices.
Oil markets remain a key risk. Iran accused the U.S. of breaking a ceasefire with new strikes, while Washington described the actions as defensive. Brent crude traded near $100 a barrel, according to Reuters. A sustained oil price spike could push up gasoline prices and inflation expectations, potentially squeezing equity valuations through higher interest rates and margin pressure.
Market Outlook
While after-hours activity showed only modest moves—with the SPDR S&P 500 ETF (SPY) up 0.04% and the Invesco QQQ Trust (QQQ) gaining 0.05%—the broader trend remains firmly in favor of AI-related names. The real test will come at Wednesday's open, when markets decide whether the record close has lasting momentum or fades as another fleeting AI rally.
