Wall Street tech stocks extend rally as AI demand offsets Middle East risks

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Tech stocks rally on AI demand

Highlights

S&P 500 and Nasdaq Composite close at record highs as strong artificial-intelligence and software demand drives tech sector gains despite geopolitical risks.
Snowflake shares climb 36% on robust AI-driven results, Dell Technologies rises 31% following fastest sales growth since 2018 and new Pentagon AI server contract.
Anthropic nears $1 trillion valuation in latest funding round, surpassing OpenAI as the most valuable AI startup, signaling continued strong investor demand for AI exposure.

AI-led gains push major indexes higher

As reported by CNBC, the S&P 500 and Nasdaq Composite close at record highs as investors continue to favor artificial-intelligence and software names despite heightened geopolitical uncertainty.

Snowflake shares surge 36% after the cloud-data company posts strong results and points to robust demand for its AI-powered platforms, helping lift the wider software sector. Dell Technologies jumps 31% after reporting its fastest sales growth since 2018 and securing a Pentagon contract that adds momentum to its expanding AI server business.

In private markets, Anthropic overtakes OpenAI to become Silicon Valley's most valuable AI startup, nearing a $1 trillion valuation in its latest funding round as more large language model companies prepare to go public this year.

Middle East conflict, oil and inflation remain in focus

Market sentiment improves earlier after Axios reports that U.S. and Iranian negotiators agree on a 60-day memorandum of understanding to extend the ceasefire, with a White House official later confirming to CNBC that the two sides have mostly agreed to the terms.

That optimism weakens hours later when Iranian state media outlet Fars reports that the country's armed forces fire missiles at unidentified targets late Thursday local time. The renewed tensions add to doubts over whether a full U.S.-Iran nuclear deal can be reached this year.

The conflict continues to reverberate through energy markets, with Exxon warning that oil inventories are on track to fall to dangerously low levels in the coming weeks, a move that could drive prices higher and curb demand. At the same time, the U.S. personal consumption expenditures price index rises 3.8% in the 12 months through April, reinforcing expectations that the Federal Reserve may keep interest rates steady until price pressures ease.

Our earlier coverage of Snowflake’s sharp post-earnings rally highlighted how strong revenue growth, raised full-year guidance, and expanded AI initiatives fueled investor optimism. We also noted that despite the bullish momentum, technical indicators were flashing overbought conditions, pointing to a potential consolidation range and higher pullback risk in the near term.

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