S&P 500 hits record high despite rising Middle East tensions

The S&P 500 closed at a record 7,580.07 on Monday, June 1, extending Wall Street’s advance even as fighting and diplomacy around Iran remained in focus. The Dow Jones Industrial Average rose 0.09% and the Nasdaq Composite gained 0.42%, according to Reuters. Technology and energy stocks led the move, while utilities and consumer discretionary shares lagged. Oil prices stayed elevated as investors weighed the risk that new Middle East developments could hit supply. ### How did stocks reach a record with Middle East tensions still rising? Reuters reported that global stocks held near record highs as strong corporate results and artificial-intelligence enthusiasm outweighed investor concern over escalating U.S.-Iran tensions. The United States said it struck Iranian military sites over the weekend, while Iran’s Revolutionary Guards said on Monday they had targeted a U.S. base in response. (finance.yahoo.com) Iranian news agency Tasnim said Iran was halting indirect negotiations with the United States after Israel ordered troops deeper into Lebanon to fight Hezbollah. Bloomberg reported that President Donald Trump said talks with Iran were continuing “at a rapid pace,” helping send the S&P 500 to around 7,600 intraday. Bloomberg also said Trump said Israel and Hezbollah had agreed to stop attacking each other, while U.S. crude pared gains to about $92 a barrel. (finance.yahoo.com) ### Which parts of the market did the lifting? Reuters said energy and technology stocks “took the front seat” in Monday’s session. Yahoo Finance’s market coverage said technology stocks were the biggest gainers, while consumer staples were the worst performers. The Technology Select Sector SPDR Fund rose 1.9%, while the Consumer Staples Select Sector SPDR Fund fell 2%, according to Yahoo Finance. (bloomberg.com) Yahoo Finance also said nine of the S&P 500’s 11 sectors finished in negative territory, a sign that the benchmark’s gain was not broadly shared. Decliners outnumbered advancers on the S&P 500 by a 1.04-to-1 ratio, while the Cboe Volatility Index fell 2.67% to 15.32. On the S&P 500, there were 27 new 52-week highs and 12 new lows. (finance.yahoo.com) ### What was driving investors besides geopolitics? Nvidia unveiled a new chip on Monday that puts artificial-intelligence capabilities directly into laptops and desktop computers, Reuters reported. Anthropic also confidentially filed for a U.S. initial public offering, Reuters said, adding to the session’s AI-driven tone. (finance.yahoo.com) Yahoo Finance said Friday’s rally had already been powered by Dell Technologies, whose shares surged 32.8% after an earnings beat tied to AI demand and a higher full-year outlook. Micron Technology also rose 5.1% on Friday, and the tech sector fund hit a 52-week high, according to that report. (finance.yahoo.com) ### What were market strategists saying about the rally? Amanda Agati, chief investment officer at PNC Asset Management Group, told Reuters that “the Iran story continues to swirl around in the background” and that it was “pretty interesting and impressive” that the market had been able to “dismiss a lot of the noise.” She said earnings growth, first-quarter reporting season and second-quarter revisions were looking strong. (finance.yahoo.com) Mark Hackett, chief market strategist at Nationwide, told Reuters that “the fundamentals and technicals converge to drive markets higher,” citing strong earnings revisions and persistent buying. Reuters also quoted him as saying equity markets had been “largely immune” to Iran news in recent weeks. (finance.yahoo.com) ### What should investors watch next? Monday’s close leaves investors watching whether the rally broadens beyond technology and energy, and whether oil prices keep climbing as Middle East headlines develop. Reuters said the latest hostilities could complicate diplomatic efforts to end the three-month-old war. The next signals are likely to come from moves in crude, volatility gauges and any new statements from Washington, Tehran, Israel or Hezbollah. (finance.yahoo.com)