U.S. stocks closed at record highs on May 29, 2026 capping a strong month as investors cheered signs of progress in U.S.-Iran negotiations and another wave of AI-driven optimism sparked by strong corporate earnings. The S&P 500 posted its ninth consecutive weekly gain, marking its longest run since 2023, as quoted on Yahoo Finance.
Iran Deal Prospects Boost Market Sentiment
Investor sentiment improved after President Trump said he would soon make a "final determination" on a potential agreement with Iran.
Markets have responded positively since Trump indicated recently that negotiations were in their final stages. A successful agreement could help ease tensions surrounding the U.S.-Iran conflict and potentially reopen the Strait of Hormuz, a critical route for global oil shipments.
The prolonged disruption in the waterway has intensified inflation concerns by pushing energy prices higher, complicating the Federal Reserve's interest-rate outlook. United States Brent Oil Fund LP BNO has lost about 13.6% over the past month.
AI Trade Continues to Drive Stocks Higher
Technology stocks remained a major force behind the market rally, supported by strong earnings and growing confidence in AI-related spending.
The technology sector has been the market's best performer since the March 30 lows, benefiting from heavy investment in AI infrastructure and data centers. State Street Technology Select Sector SPDR ETF XLK surged 19.8% over the past month (as of May 29, 2026).
Dell Sparks Surge in AI Infrastructure Stocks
Shares of Dell Technologies DELL soared as much as 32.8% after the company reported better-than-expected earnings and issued a bullish outlook.
Dell highlighted strong demand for AI servers powered by Nvidia chips and projected continued growth in data-center spending. The upbeat forecast reinforced investor confidence that AI infrastructure investment remains in its early stages.
The strong results also lifted other AI infrastructure providers, including Hewlett Packard Enterprise and Super Micro Computer, whose shares gained sharply following Dell's report.
Palantir Gains on Dell Partnership Validation
Shares of Palantir Technologies PLTR jumped about 9% on May 29, 2026 after Dell's outlook underscored the potential of their recently announced partnership.
The collaboration integrates Palantir's software platforms into Dell's AI Factory powered by Nvidia technology, enabling enterprises to deploy AI applications and agents more efficiently, per the above-mentioned Yahoo Finance article.
Semiconductor Stocks Lead Monthly Advance
Semiconductor companies were among the biggest winners during the month as enthusiasm for AI-related hardware continued to build.
Micron Technology MU surged more than 80% during the month, while Advanced Micro Devices gained over 40%. SanDisk also delivered strong gains, rising nearly 50%. VanEck Semiconductor ETF SMH has added about 18.2% over the past month.
Seesaw in Space Stocks
Space-related stocks witnessed a massive rally in May as excitement builds around the highly anticipated IPO of SpaceX, which could become the largest public offering ever. According to The Wall Street Journal, the company is targeting a June 12 debut and could raise as much as $80 billion at a valuation near $2 trillion (read: Space Stocks Surge as SpaceX IPO Frenzy Builds).
However,space-related stocks sold off sharply on May 29, 2026 after a New Glenn rocket operated by Blue Origin exploded during a launchpad test at Cape Canaveral.
The incident weighed on a sector that had recently rallied ahead of the anticipated IPO of SpaceX. Procure Space ETF UFO lost about 3.7% while Roundhill Space & Technology ETF MARS retreated about 5.7% on May 29.
Rising Stagflation Risks
Meanwhile, sticky inflation and rising rate fears are acting as headwinds. A longer war-like scenario could push inflation significantly higher while slowing growth. Policymakers fear that sustained energy disruptions – especially via the Strait of Hormuz – may trigger stagflation, a worst-case scenario for the global economy.
The Federal Reserve’s preferred inflation measure accelerated to a three-year high in April, heightening concerns among policymakers and investors that price pressures are becoming more entrenched across the economy, as quoted on Yahoo Finance.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
Micron Technology, Inc. (MU): Free Stock Analysis Report
State Street Technology Select Sector SPDR ETF (XLK): ETF Research Reports
VanEck Semiconductor ETF (SMH): ETF Research Reports
United States Brent Oil ETF (BNO): ETF Research Reports
Procure Space ETF (UFO): ETF Research Reports
Palantir Technologies Inc. (PLTR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).