The bull market got a boost on Tuesday as hopes grew that the end of the Iran war is close.
US stocks jumped to fresh records Tuesday on hopes that the Iran war will soon end.
Micron led the tech rally, with shares up more than 20% on a bullish UBS forecast.
Bond yields and oil prices tumbled, a sign that anxieties about inflation may be easing.
US stocks jumped records as traders held out hope for a peace that would end the Iran war. President Donald Trump said that a deal with Iran is in sight in a Truth Social post on Monday. He said talks with Iran were "proceeding nicely," though he warned of continued military action if a deal fell through.
"It will only be a Great Deal for all or, no Deal at all — Back to the Battlefront and shooting, but bigger and stronger than ever before — And nobody wants that!", the president wrote.
Secretary of State Marco Rubio also teased a potential reopening of the Strait of Hormuz on Tuesday, adding that the US and Iran could come to a deal in "a couple of days."
Markets remained optimistic that a deal could be near even as signs that negotiations between the US and Iran are fragile. The US said it conducted strikes in "self-defense" near the Strait of Hormuz on Tuesday.
"The United States committed a gross violation of the ceasefire in the Hormozgan region in the past 48 hours," Iran's foreign ministry said in a statement Tuesday morning. "Iran holds the US regime responsible for all the consequences resulting from these aggressive and unjustified actions."
The Nasdaq 100 rose 1%, driven to a new record by a fresh rally in memory stocks. The S&P 500 also hit a record high, extending its gains after it notched its longest weekly winning streak since 2023 last Friday.
Here's where US indexes stood at the 4 p.m. ET closing bell:
S&P 500
: 7,519.12, up 0.61%
Dow Jones Industrial Average
: 50,461.68, down 0.23% (-118.02 points)
Nasdaq 100
: 30,001.32, up 1.76%
Micron led the tech rally, notching a $1 trillion valuation for the first time on Tuesday. Shares of the chipmaker popped 21% after a highly bullish UBS forecast made the rounds on social media. Trump also praised the stock recently, fueling speculation that the government could soon take a stake in the company.
Elsewhere, bond yields tumbled, a sign that investors are taking Trump's comments seriously and are feeling less anxious about inflation than they did last week. The hope has been that an end to the war will turn oil flows back on in the Persian Gulf, sending crude prices down and dispelling some of the inflationary pressure that has weighed on economic sentiment recently.
The yield on the 10-year US Treasury bond dropped 7 basis points to around 4.49% on Tuesday. The yield is down 18 basis points from its peak last Tuesday.
The 30-year US Treasury, which reached its highest level since before the Great Financial Crisis last week, also dropped 5 basis points to trade around 5.02%, remaining slightly above the critical 5% threshold. The yield is down around 16 basis points from its prior peak.
Oil prices were mixed on Tuesday, but have also come down in the past week. Brent crude, the international benchmark, ticked 3% higher, though West Texas Intermediate crude slipped 2% on Tuesday, trading around $93 a barrel.
"In general, we've seen a bond rally last several trading days (since May 20th), in tandem with modestly falling oil prices — even as event-driven volatility risks linger," Robert Embree, a senior economist at Rosenberg Research, wrote on Tuesday.
This article was written by jsor@businessinsider.com (Jennifer Sor) from Business Insider and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.