U.S. Three Major Indices Hit Record Highs, Oil Prices Fall

U.S. stocks closed higher Wednesday, with all three major indices hitting record highs. Micron Technology continued its strong rally, while oil prices fell on hopes of a U.S.-Iran ceasefire.

Dow rose 182.60 points, or 0.36%, to 50,644.28; Nasdaq rose 18.55 points, or 0.07%, to 26,674.73; S&P 500 rose 1.24 points, or 0.02%, to 7,520.36.

The decline in oil prices provided support. Iran's state TV said the country pledged to restore commercial navigation through the Strait of Hormuz to pre-war levels within a month, sending U.S. crude futures down over 5% to around $88 per barrel.

However, the White House denied the Iranian state media report, calling it "completely fabricated."

Micron Technology closed up 3.6%. The stock had surged 19% the previous day on an optimistic UBS report, with market cap exceeding $1 trillion for the first time.

UBS believes the stock still has more than double upside as memory suppliers sign long-term contracts to promote AI deployment. Investors have turned to memory chipmakers as a preferred way to participate in the AI bull market. Micron's Korean peer SK Hynix also reached a $1 trillion market cap overnight.

The tech sector rally pushed the broader indices and the tech-heavy Nasdaq to fresh intraday and closing highs in the previous session. The S&P 500 rose 0.61% Tuesday, Nasdaq surged 1.19%, while the blue-chip Dow fell 118.02 points, or 0.23%.

Investors were also encouraged by President Trump's comments that negotiations to end the war with Iran were "going well." Despite a U.S. "self-defense" strike early Tuesday in southern Iran, Central Command spokesman Tim Hawkins said the U.S. exercised restraint during the "ongoing ceasefire" between the two countries.

Expectations of easing tensions with Iran, along with a strong earnings season, have pushed stocks to records this month. But Citigroup U.S. equity strategist Drew Pettit sees limited room for further gains.

In a CNBC program Tuesday afternoon, he said: "Yields are high now, the 10-year Treasury yield is about 4.50%, inflation expectations are rising, and the yield curve has actually flattened this year. None of these factors support sustainably higher valuation multiples."

Pettit's year-end target for the S&P 500 is 7,700, implying only a modest 2% upside.

Goldman Sachs, however, has a different view. It raised its year-end S&P 500 target from 7,600 to 8,000 late Tuesday, citing continued strong earnings growth despite some geopolitical headwinds.