S&P 500, Nasdaq hit record highs on US-Iran ceasefire hopes and AI rally

The S&P 500 and Nasdaq hit record closing highs on May 28 after reports of a US-Iran ceasefire extension draft agreement and strong AI sector performance, while the Dow Jones also closed at a record high. Key drivers included AI-related stocks like Snowflake, which surged 36% after a $6 billion AWS deal, and inflation data showing a three-year high in April, alongside revised Q1 GDP growth at 1.6%." "article": "Major US stock indices reached record closing highs on May 28, fueled by hopes of a US-Iran ceasefire extension and optimism around artificial intelligence. The S&P 500 rose 0.58% to 7,563.63, the Nasdaq climbed 0.91% to 26,917.47, and the Dow Jones gained 0.05% to 50,668.97. Reports indicated the US and Iran had drafted a 60-day ceasefire extension, though no finalized text exists and approval by President Donald Trump is pending. The AI sector led gains, with Snowflake jumping 36% after announcing a $6 billion, five-year AI infrastructure deal with Amazon Web Services and raising its revenue forecast. Microsoft rose 3.5% following reports of an upcoming coding model release, while Marvell Technology climbed 3% after UBS increased its price target. Healthcare stocks also advanced, with Eli Lilly up 4% after CVS Health reinstated coverage for its weight-loss drugs. Economic data showed US inflation accelerating in April, marking the fastest pace in three years due to higher energy prices amid Middle East tensions. Meanwhile, first-quarter GDP growth was revised downward to a 1.6% annualized increase, with slower momentum expected in the current quarter. Despite these risks, investors focused on AI-driven earnings growth, with the S&P 500 trading at a 21-22 forward earnings multiple compared to its 10-year average of 19.7. Broader market activity reflected strong bullish sentiment, with advancing stocks outnumbering decliners by 1.74-to-1 on the NYSE and 1.8-to-1 on the Nasdaq. The S&P 500 recorded 18 new 52-week highs, while the Nasdaq saw 127 new highs. Retailers Dollar Tree and Best Buy also surged after raising profit and sales forecasts, respectively, and drone companies rose on reports of potential Trump administration funding. Analysts noted that geopolitical risks, including Middle East tensions, were being overshadowed by resilient corporate earnings and AI-driven investment opportunities. Jitania Kandhari of Morgan Stanley Investment Management highlighted that instability could boost spending in AI-related sectors like cybersecurity and defense, reinforcing long-term growth prospects.