Wall Street ended Monday at new record highs, with the S&P 500 and Nasdaq Composite both closing at all-time peaks, fueled by a surge in artificial intelligence-related stocks. Nvidia led the charge, jumping 6.3% after unveiling its new RTX Spark chip designed to bring AI capabilities to personal computers. The broader market rally, however, showed signs of narrowness as only the technology and energy sectors among the S&P 500's 11 major groups finished in positive territory.
The S&P 500 rose 19.90 points, or 0.26%, to close at 7,599.96. The Nasdaq Composite added 114.19 points, or 0.42%, ending at 27,086.81. The Dow Jones Industrial Average eked out a gain of 46.42 points, or 0.09%, to finish at 51,078.88. Despite the record close, after-hours trading saw major index-tracking ETFs slip, with the SPY (S&P 500) down 0.23%, the QQQ (Nasdaq 100) off 0.35%, and the DIA (Dow) falling 0.22%.
HPE Shines After Hours
Hewlett Packard Enterprise (HPE) stole the spotlight in extended trading, with shares surging 36% after the company reported fiscal second-quarter results that beat expectations. Revenue jumped 40% year-over-year to $10.7 billion, while non-GAAP diluted earnings per share came in at $0.79. The company raised its fiscal 2026 revenue growth guidance to between 29% and 33% and expects at least $3.5 billion in free cash flow for the year. CEO Antonio Neri cited "strong execution and healthy demand," while CFO Marie Myers noted the company has been "agile" with cost increases and expects AI revenue conversion to peak in the fourth quarter.
AI Momentum Broadens Beyond Nvidia
The AI trade is expanding beyond Nvidia as investors increasingly look for companies that can translate AI demand into tangible revenue. Other tech heavyweights also moved higher: Microsoft rose 2.3%, ServiceNow added 9.2%, and IBM gained 7.6%. Micron advanced 6.6%, crossing the $1,000 mark for the first time. However, Qualcomm and Intel declined, reflecting the selective nature of the rally. The market's focus is shifting to server, networking, and software names that could benefit from AI infrastructure spending.
Oil Surges on Geopolitical Tensions
Oil prices spiked 4.24%, with Brent crude closing at $94.98 per barrel, as renewed tensions between the U.S. and Iran cast a shadow over diplomatic talks. The rise in energy costs added to market uncertainty. "The market was trying to price a path to peace," said Amanda Agati, chief investment officer at PNC Asset Management Group. Bill Strazzullo of Bellcurve Trading noted that "inflation is still a major story," as the 10-year Treasury yield remained near 4.453%.
Manufacturing Data Points to Growth
The Institute for Supply Management reported that its manufacturing PMI hit 54.0 in May, the strongest reading since May 2022. Any reading above 50 indicates expansion. However, Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, expressed doubts about the durability of the manufacturing upturn, noting that some firms may be pulling orders forward due to supply-chain concerns.
Market Outlook
Investors remain cautious as they weigh the potential for further volatility from elevated oil prices, rising bond yields, and Friday's payrolls data. Higher yields could pressure growth stocks by reducing the present value of future profits. The 10-year Treasury yield briefly touched 4.52% before settling at 4.46%, raising concerns about borrowing costs for small firms and AI data center funding. With Broadcom's earnings due Wednesday and the May jobs report on Friday, traders will be watching to see if Monday's record finish signals a broadening rally or remains concentrated in a few big names.
