Wall Street capped Thursday with fresh record closes across the major indexes, as investors weighed a mixed batch of economic data and a late surge in Dell Technologies following its bullish artificial intelligence outlook. The S&P 500 rose 0.58% to 7,563.63, the Nasdaq climbed 0.91% to 26,917.47, and the Dow Jones Industrial Average edged up 0.05% to 50,668.97.
In after-hours trading, Dell (DELL) emerged as the standout, leaping roughly 39% to $440.25 after the company raised its annual revenue forecast for AI servers to approximately $60 billion, up from a prior $50 billion. The move underscores the market's insatiable appetite for AI-related hardware, particularly servers powered by Nvidia (NVDA) chips. Dell also lifted its full-year topline target to a range of $165 billion to $169 billion, reflecting robust demand from data-center expansions.
Economic Data Clouds the Picture
The rally came despite fresh inflation data showing the Personal Consumption Expenditures (PCE) price index—the Federal Reserve's preferred gauge—rose 3.8% year-over-year in April, its fastest pace since May 2023. Core PCE, excluding food and energy, came in at 3.3%, well above the Fed's 2% target. "Increasingly uncomfortable for the Fed," said Olu Sonola, head of U.S. economics at Fitch Ratings, as quoted by Reuters.
Adding to the cautious tone, the government revised first-quarter gross domestic product growth down to an annualized 1.6% from an earlier estimate of 2.0%, as consumer spending and inventories both came in lighter than initially thought. Gregory Daco, chief economist at EY-Parthenon, described the expansion as masking an "uneven economic foundation."
Geopolitical Factors and Market Sentiment
Stocks found support during regular trading from reports that the U.S. and Iran had drafted a potential 60-day ceasefire extension, though the agreement still required President Donald Trump's sign-off and was not final according to Iran's Tasnim news agency. The prospect of reduced geopolitical tensions helped lift equities, as lower war risk could ease upward pressure on energy prices. However, traders remain on edge. "Traders are on a hair trigger," Jamie Cox, managing partner at Harris Financial Group, told Reuters, noting that markets may be expecting inflation to cool faster than it actually will.
AI-Driven Earnings Momentum
Artificial intelligence continued to dominate market narratives. Snowflake (SNOW) shares jumped after the company lifted its full-year revenue target and announced a $6 billion, five-year agreement with Amazon Web Services, its primary cloud provider. Datadog (DDOG) and MongoDB (MDB) also climbed, benefiting from strong enterprise data spending. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the action shows "how quickly sentiment can turn" when AI delivers tangible revenue growth.
Dell's after-hours surge further amplified the AI theme. Chief Operating Officer Jeff Clarke told analysts on the post-earnings call, "We're repricing… every day," citing higher costs tied to inflation and memory chip shortages. Melissa Otto, who leads research at S&P Global Visible Alpha, said Dell is "better positioned than rivals" due to its scale and supplier relationships. For investors tracking AI-server demand, Super Micro Computer (SMCI) remains a key benchmark.
Other Notable Movers
Eli Lilly (LLY) gained 4% after CVS Health announced it would resume coverage for Zepbound and add Lilly's Foundayo pill to its formularies, potentially reducing client costs for these drugs by an additional 10% to 15%. Best Buy (BBY) shares rose after the retailer forecast second-quarter sales ahead of Wall Street expectations, citing strong demand for AI-powered phones, gaming consoles, and higher-margin marketplace categories. CFO Matt Bilunas noted that "material inventory supply constraints" are not expected through the remainder of the fiscal year.
Market Outlook
Thursday's rally leaves little room for error. A failed ceasefire could send oil and inflation higher again, and with PCE data running hot, the Fed remains in no rush to cut rates. Stocks at record highs reflect investor bets on stronger earnings, sustained AI demand, and hopes for fewer global shocks—all of which could prove fragile. As Jitania Kandhari, deputy CIO at Morgan Stanley Investment Management, told Reuters, investors remain focused on earnings and a "relatively resilient" global economy.
