Dow rises 140 points as AI rally pushes S&P 500, Nasdaq toward records

Wall Street opened higher on Wednesday as investors extended a technology-driven rally fueled by artificial intelligence optimism, while also monitoring fragile diplomatic developments between the United States and Iran.

The S&P 500 and the Nasdaq Composite climbed nearly 0.07%.

The Dow Jones Industrial Average gained roughly 147 points.

The gains followed another record-setting session for US equities on Tuesday, when both the S&P 500 and Nasdaq Composite closed at fresh all-time highs amid continued enthusiasm around semiconductor and AI infrastructure stocks.

At the same time, investors remained cautiously optimistic that tensions involving Iran could eventually ease despite recent US military activity near the Strait of Hormuz.

AI-driven technology rally continues

Technology and semiconductor stocks once again led market momentum as investors continued betting that rising capital expenditures tied to artificial intelligence infrastructure will support earnings growth across the sector.

Micron Technology shares surged another 3% after rallying 19% during Tuesday’s session, when the company surpassed a $1 trillion market capitalization for the first time.

The rally accelerated after UBS said Micron shares could more than double from current levels due to long-term supply agreements tied to AI deployment.

The broader technology rally helped drive the S&P 500 and Nasdaq Composite to new records during the previous session.

The S&P 500 rose 0.61% Tuesday, while the Nasdaq gained 1.19%. The Dow Jones Industrial Average, however, fell 118 points.

Goldman Sachs also raised its year-end target for the S&P 500 to 8,000 from 7,600, citing continued strength in corporate earnings growth.

Investors monitor Iran developments and oil prices

Geopolitical developments involving Iran continued influencing market sentiment, though investors appeared increasingly focused on the possibility of a diplomatic resolution.

President Donald Trump said earlier this week that negotiations with Iran were “proceeding nicely,” while Secretary of State Marco Rubio suggested a potential agreement could take “a few days.”

A fragile truce between Washington and Tehran remained in place despite recent US strikes near the Strait of Hormuz. Iran described the strikes as a “gross violation” of the ceasefire agreement.

Oil prices declined Wednesday after Iranian state television reportedly said the country remained committed to restoring commercial shipping traffic through the Strait of Hormuz within one month.

US crude futures fell below $89 per barrel following the report.

Fed outlook and earnings remain in focus

Markets are also preparing for upcoming economic data that could shape expectations for Federal Reserve policy under new Chair Kevin Warsh.

Investors are closely watching Thursday’s release of the personal consumption expenditures index, the Fed’s preferred inflation measure.

Money markets currently expect the central bank to keep interest rates unchanged for most of the year, though some traders continue pricing in the possibility of a rate increase later in 2026.

A strong earnings season has also continued supporting equities. Analysts now expect first-quarter earnings growth of approximately 29% year-over-year.