NEW YORK — The S&P 500 and Nasdaq Composite closed at fresh all-time highs Tuesday as investors poured back into artificial intelligence and semiconductor stocks following the Memorial Day holiday, pushing technology shares sharply higher while more traditional consumer companies struggled.
The standout move came from Micron Technology, which surged nearly 20% and crossed a $1 trillion market value for the first time after a major Wall Street upgrade tied to exploding demand for AI memory chips.
The split between soaring technology names and weakness in consumer-focused companies defined the entire trading session.
The Closing Numbers
- S&P 500: 7,519.12, up 0.61%, record close
- Nasdaq Composite: 26,656.18, up 1.19%, record close
- Dow Jones Industrial Average: 50,461.68, down 0.23%
- Russell 2000: Broke above 2,900 for the first time ever
Technology stocks dominated the rally.
Sixteen of the top 20 gainers in the S&P 500 came from semiconductor or computer hardware companies as investors continued betting heavily on artificial intelligence infrastructure demand.
Micron Leads The Market
Micron Technology jumped 19.3% after UBS analyst Timothy Arcuri sharply raised his price target on the stock, citing overwhelming demand for high-bandwidth memory chips used inside AI systems.
The chips are essential for powering advanced AI processors built by companies like Nvidia, and demand has accelerated as hyperscale data center construction continues globally.
UBS said Micron’s production capacity for AI memory products is effectively sold out through the end of 2026.
The rally pushed Micron into the trillion-dollar market-cap club alongside:
- Apple
- Microsoft
- Nvidia
- Amazon
- Alphabet
- Meta
- Tesla
- Broadcom
The stock has risen roughly 700% over the past year.
Why The Dow Fell
While the Nasdaq and S&P hit records, the Dow Jones Industrial Average moved lower largely because of a sharp decline in AutoZone shares.
AutoZone fell 9.6% after reporting earnings that beat Wall Street estimates but revealed pressure on profit margins and softer international performance.
Because the Dow is price-weighted and AutoZone’s stock trades above $3,500 per share, the decline had an outsized impact on the index.
Walmart also weighed on the Dow after recent warnings from executives that higher gasoline prices are squeezing lower-income shoppers.
Quantum Stocks Stay Strong
Quantum computing companies continued climbing following last week’s announcement that the Trump administration will invest roughly $2 billion into nine American quantum firms in exchange for government ownership stakes.
Shares of:
- D-Wave Quantum
- Rigetti Computing
- IonQ
all traded higher.
IBM, which is receiving the largest federal quantum grant, also gained.
Intel Slips After Downgrade
Intel moved lower after analysts at Northland Capital Markets downgraded the stock, warning that future spending by large cloud providers could slow as AI infrastructure costs continue rising.
The downgrade highlighted growing concerns that some technology companies may eventually hit limits on how much capital they can continue pouring into AI expansion.
Consumer Confidence Weakens
Markets also digested fresh economic data Tuesday.
The Conference Board reported that U.S. consumer confidence slipped in May as Americans expressed increasing concern over inflation and economic conditions tied to the Middle East conflict and higher fuel prices.
At the same time, a new Case-Shiller housing report showed home-price growth slowing sharply nationwide, with more than half of major U.S. cities now showing year-over-year price declines.
Treasury Yields Ease
The benchmark 10-year Treasury yield moved lower during the session.
Lower yields generally help technology valuations because future earnings become more attractive when borrowing costs decline.
Investors increasingly believe the Federal Reserve could still cut interest rates later this year despite elevated energy prices and geopolitical tensions.
Oil Remains Volatile
Oil prices remained elevated as investors monitored developments involving Iran and the Strait of Hormuz.
WTI crude traded above $90 per barrel during the session after new comments from Iran’s Revolutionary Guard raised concerns about potential retaliation tied to ceasefire negotiations.
Energy markets continue reacting sharply to any developments involving the region because roughly one-fifth of global oil shipments move through the Strait of Hormuz.
Space Stocks Rally Again
Several space-related companies also surged as enthusiasm surrounding the upcoming SpaceX IPO continued spreading across the sector.
Rocket Lab, Redwire, and AST SpaceMobile all posted strong gains.
SpaceX is expected to launch what could become the largest IPO in history next month with a targeted valuation near $1.75 trillion.
The Week Ahead
Investors are now focused on:
- Friday’s Personal Consumption Expenditures inflation report
- First-quarter GDP revisions
- Upcoming earnings from Salesforce, Dell Technologies, and Zscaler
- Multiple Federal Reserve speeches scheduled this week
Markets remain caught between two competing forces:
explosive AI-driven growth in technology and mounting pressure on consumers from higher prices and slowing affordability.
For now, the technology rally continues to overpower everything else.
JBizNews Desk — New York
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