Stocks rise on Iran deal hopes, Micron leads tech rally

Hope for a U.S.-Iran deal drove stocks higher at the open, with the S&P 500 rising 0.8% and the Nasdaq Composite up 1.3% while the Dow Jones Industrial Average hovered near flat. The move came after U.S. markets were closed Monday for Memorial Day, and it extended a rally that has been increasingly concentrated in technology and semiconductor names.

Micron Technology led the charge, jumping 15% after analysts turned more bullish on the memory chip maker. UBS said it sees more than 100% upside in the stock, pointing to the company’s long-term agreements. The strength spread across the memory trade: Seagate Technology gained 3%, Western Digital rose 8%, and the Roundhill Memory ETF added 12%. The chip bounce came as traders again leaned into artificial intelligence enthusiasm even while geopolitical risk stayed front and center.

The optimism rested on a fragile political backdrop. Donald Trump said Monday that talks with Iran were “proceeding nicely,” though he warned the U.S. could go on the offensive if negotiations broke down. Early Tuesday, the United States said it carried out “self defense” strikes in southern Iran, including against missile launch sites and Iranian boats attempting to place mines. U.S. Central Command spokesman Tim Hawkins said the U.S. used “restraint during the ongoing ceasefire” between the two countries.

Oil markets reflected that tension. West Texas Intermediate crude for July traded around $93 a barrel, about 2% lower, while Brent traded around $100 a barrel, up roughly 4% on the day after the strikes. Traders were trying to reconcile the chance of a diplomatic breakthrough with the risk that renewed fighting could disrupt shipping and energy flows in the Middle East.

Adam Crisafulli of Vital Knowledge said the consensus view still assumes some kind of détente will be formally reached within days, raising the question of how much of the outcome is already priced in. That skepticism follows a strong stretch for equities: the S&P 500 climbed 0.9% last week, the Dow gained 2.1% for its third weekly rise in four weeks, and the Nasdaq added 0.5% for its seventh gain in eight weeks.

Reuters said index futures were poised near record highs as AI-related stock optimism offset Middle East concerns, while Iran’s Tasnim news agency reported that Tehran was seeking the release of $24 billion in frozen overseas funds in the talks with Washington. Earlier, on May 21, Wall Street had already reacted sharply to reports of a possible agreement, with Marco Rubio saying there were “some good signs” and the Dow closing at a record high.