The S&P 500 moved higher on Tuesday as technology shares led Wall Street gains and traders watched talks between the United States and Iran. Investors focused on hopes that a deal could help end the war and reopen smoother shipping through the Strait of Hormuz.

The NASDAQ Composite also advanced as chip stocks rallied, while the Dow Jones Industrial Average traded near the flatline. US markets reopened after the Memorial Day holiday, allowing Wall Street to catch up with gains seen in other global markets.

S&P 500 Climbs as Traders Watch Iran Talks

The S&P 500 gained around 0.8% on Tuesday, while the NASDAQ rose about 1.3%. Both indexes reached new all-time intraday highs as demand for technology and semiconductor stocks remained strong. Meanwhile, the Dow traded close to unchanged.

Market sentiment improved after President Donald Trump said talks with Iran were ‘proceeding nicely.’ However, the outlook remained uncertain after he warned that the US could act if negotiations failed. That mixed message kept investors focused on every update from Washington and Tehran.

US Secretary of State Marco Rubio also said a deal could ‘take a few days.’ His remarks slowed hopes for an immediate agreement, even as traders continued to price in the chance of a diplomatic path.

However, fresh tension remained in the background. US officials said American forces carried out ‘self-defense’ strikes in southern Iran. According to the US Central Command, targets included missile launch sites and boats that were attempting to place mines.

Micron Leads Tech Rally as Memory Stocks Jump

Micron Technology became one of the strongest movers in the S&P 500 after its shares jumped about 15%. UBS raised its outlook on the stock and said it sees more than 100% upside, pointing to benefits from long-term supply agreements.

That move boosted the wider memory chip group. Seagate Technology gained about 3%, while Western Digital rose around 8%. The Roundhill Memory ETF climbed about 12% and touched a new 52-week high.

The rally showed renewed confidence in AI-linked demand for memory chips. Investors have continued to favor companies tied to data centers, AI infrastructure, and advanced computing needs.

Micron had already ended the previous week with a strong gain, despite earlier pressure on memory chip names. Tuesday’s move added fresh momentum to a sector that has become central to Wall Street’s broader technology trade.

Oil Prices Stay Volatile as Hormuz Risk Remains

Oil remained a key driver for financial markets. US crude moved off its lows after the fresh US strikes, while Brent crude traded near the $100 level during the session.

The Strait of Hormuz remains central to the market’s focus as the waterway carries a large share of global oil flows. Any delay in reopening full shipping activity can keep energy prices elevated and add pressure to inflation.

Adam Crisafulli of Vital Knowledge wrote, “The consensus view still assumes there will be some type of a détente formally reached within the next few days between Washington and Tehran.” He added that investors must now ask how much of that hope already sits in stock prices.

Lower oil prices helped stocks last week, with US crude posting its worst weekly drop since April 17. However, crude remains well above earlier-year levels, keeping inflation and rate concerns alive.

Earnings and AI Optimism Support Wall Street

Corporate earnings also supported the rally. Analysts now expect strong earnings growth this year and next year, helping investors defend higher stock prices even as oil and rate risks remain.

Adam Parker of Trivariate Research wrote, “There is no doubt that fundamentals are at least partially responsible for the market rally.” He also noted that earnings estimates have continued to rise while forward valuation pressure has eased.

Meanwhile, traders have reduced expectations for easier Federal Reserve policy. CME FedWatch data showed markets pricing a higher chance of a July rate hike than one month earlier.

However, AI optimism remained strong enough to offset some of those concerns. Semiconductor names led gains, and the Philadelphia Semiconductor Index touched a new high.

FedEx and Space Stocks Add to Market Action

FedEx also drew attention after Wells Fargo set a $450 price target on the stock. The firm said FedEx Freight could benefit from better pricing and improved leadership under John Smith.

Wells Fargo also pointed to potential upside from the planned freight spin and better parcel pricing. Analysts said the stock still trades at a discount to peers, which could support further gains.

Space-related stocks also advanced as investors watched reports around a future SpaceX IPO. Intuitive Machines, Planet Labs, and Rocket Lab moved higher during the session.

Overall, Tuesday’s market action showed investors balancing two forces. Hopes for a US-Iran deal supported risk appetite, while Micron and the AI trade pushed technology shares to fresh highs.

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