The Nasdaq Composite and Nasdaq 100 closed at record highs on Tuesday as falling oil prices and renewed enthusiasm for AI stocks drove a tech rally. The S&P 500 finished flat and the Dow slipped as Treasury yields eased on hopes for progress in U.S.-Iran talks.
The Nasdaq Composite climbed 0.45% to a record close of 27,244.28, its first record close since June 2026. The Nasdaq 100 rose 0.82% to a record 30,732.40, outperforming the broader market. The S&P 500 was marginally lower at 7,764.64, while the Dow Jones Industrial Average shed 185.14 points, or 0.36%, to 51,863.69.
AI optimism lifts chipmakers
Investors pointed to renewed enthusiasm around artificial intelligence as a driver behind the rally. The Financial Times reported that Meta's new Muse AI model quickly became the most downloaded free app on the Apple App Store after its launch this month, a development that boosted sentiment across the tech sector. Meta itself rose 11.4% on Monday before shedding 0.6% on Tuesday.
Chipmakers led the gains. According to the Financial Times: "AI Fomo [fear of missing out] is back in force", said Emmanuel Cau, chief European equities strategist at Barclays. Sandisk gained 6.8%, Seagate Technology rose 4.8% and Western Digital added 3.7% as investors bet the technology would boost chip demand.
Oil retreats as Iran diplomacy advances
Crude prices fell for a fifth straight session as traders weighed signs of progress in talks between Washington and Tehran. Brent crude settled down 1.09% at $99.25 a barrel, while U.S. crude fell 1.24% to $94.59. President Trump said U.S. officials held a constructive meeting with Iran's delegation, though he told the United Nations General Assembly he still faces a major decision on whether to pursue a deal with Iran or destroy the country militarily.
However, no agreement was reached on most of the disputed issues, and another meeting is expected in the coming days. Treasury yields eased alongside the retreat in oil, with the 10-year yield trading at 4.959%, a shift traders read against the backdrop of the Federal Reserve's recent quarter-point interest rate hike. Lower yields eased some of the valuation pressure on technology shares whose earnings sit further in the future.
Sources: CNBC, Financial Times, InvestingLive
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