Dow jumps 370 Points as AI optimism, Iran talks lift stocks

Wall Street opened higher on Friday ahead of the Memorial Day holiday weekend as investors monitored ongoing diplomatic efforts surrounding the nearly three-month-long conflict in the Middle East, while easing Treasury yields and continued enthusiasm around artificial intelligence supported broader market sentiment.

The Dow Jones Industrial Average rose roughly 373 points, or 0.74%, while the S&P 500 gained about 0.59%.

The Nasdaq Composite also climbed approximately 0.59% in trading.

The rebound followed another volatile week for global markets, with investors balancing concerns over oil-driven inflation risks against optimism that diplomatic negotiations between Washington and Tehran could eventually ease geopolitical tensions.

The Dow Jones Industrial Average closed at a record high on Thursday for the first time since February 10, becoming the last of the three major US stock indexes to return to all-time highs this month.

Investors focus on Iran peace negotiations

Investor sentiment remained highly sensitive to developments surrounding the US-Iran conflict.

According to media reports, Iran’s foreign minister met with Pakistan’s interior minister to discuss proposals aimed at ending the conflict, while negotiations between Tehran and Washington continued over Iran’s uranium stockpile and control of the Strait of Hormuz.

Oil prices traded modestly higher on Friday but remained below peaks reached earlier in the week as traders speculated that a diplomatic solution could eventually stabilize energy flows through the Strait of Hormuz, one of the world’s most important oil shipping routes.

Bond markets also steadied after sharp volatility earlier in the week.

The benchmark 10-year Treasury yield slipped to around 4.54%, while the 30-year Treasury yield eased to roughly 5.07%.

Earlier this week, surging oil prices and fears of prolonged conflict had pushed Treasury yields sharply higher, with the 30-year bond yield reaching its highest level since before the global financial crisis.

AI optimism and earnings continue supporting stocks

Despite geopolitical uncertainty, investor appetite for technology and artificial intelligence-related stocks remained resilient.

UBS Global Wealth Management raised its year-end 2026 target for the S&P 500 to 7,900 from 7,500, citing strong consumer spending and sustained demand for data center infrastructure tied to AI expansion.

Semiconductor stocks continued to support broader market gains.

Nvidia shares continued decline after falling 1.7% on Thursday despite reporting stronger-than-expected quarterly guidance.

Shares of AMD, Marvell Technology, and Broadcom also traded higher.

Analysts have continued to point to artificial intelligence demand as a major driver behind the market’s rally this year, helping offset concerns tied to inflation and global geopolitical risks.

The S&P 500 is now on track for its eighth consecutive weekly gain, which would mark its longest winning streak since late 2023.

Corporate movers remain active

Several individual stocks also moved sharply following earnings and corporate announcements.

Workday surged 7% after the human resources software provider exceeded Wall Street expectations for quarterly revenue and profit.

Estée Lauder shares climbed about 11% after the cosmetics company and Spanish beauty group Puig ended merger discussions that had previously weighed on investor sentiment.

Markets will also monitor the final reading of May US consumer sentiment later Friday before US exchanges close Monday for the Memorial Day holiday.