All three major US stock indices hit record highs; crude oil falls

U.S. stocks closed higher on Wednesday, with all three major indices hitting record highs. Micron Technology extended its epic rally, while oil prices fell on hopes of a U.S.-Iran ceasefire.

The Dow rose 182.60 points, or 0.36%, to 50,644.28; the Nasdaq gained 18.55 points, or 0.07%, to 26,674.73; and the S&P 500 added 1.24 points, or 0.02%, to 7,520.36.

The drop in oil prices provided market support. U.S. crude futures fell more than 5% to around $88 a barrel after Iran's state TV said the country pledged to restore commercial navigation through the Strait of Hormuz to pre-war levels within a month. However, the White House denied the Iranian state media report, calling it "completely fabricated."

Micron Technology closed up 3.6% on Wednesday. The stock had surged 19% the previous day on an upbeat UBS report, pushing its market cap above $1 trillion for the first time. UBS believes the stock still has more than double the upside as memory suppliers sign long-term agreements to drive AI adoption. Investors have turned to memory chip makers as a preferred way to participate in the AI bull market. Micron's Korean peer SK hynix also reached a $1 trillion market cap overnight.

The tech sector's gains pushed the broader indices and the tech-heavy Nasdaq to fresh intraday and closing highs in the previous session. The S&P 500 rose 0.61% on Tuesday, and the Nasdaq jumped 1.19%, while the blue-chip Dow fell 118.02 points, or 0.23%.

Investors were also encouraged by President Donald Trump's remarks that negotiations to end the war with Iran were "going well." Despite a U.S. "self-defense" strike in southern Iran early Tuesday, Central Command spokesman Tim Hawkins said the U.S. showed restraint during a "continued ceasefire" between the two countries.

Expectations of eased Iran tensions, coupled with a strong earnings season, drove stocks to records this month. But Citigroup U.S. equity strategist Drew Pettit believes there is limited room for further gains. "Rates are at elevated levels, the 10-year Treasury yield is around 4.50%, inflation expectations have risen, and the yield curve has actually flattened further year-to-date," he said on CNBC Tuesday afternoon. "All these factors do not support a higher valuation multiple going forward."

Pettit's year-end target for the S&P 500 is 7,700, implying only a modest 2% upside. Goldman Sachs holds a different view. The bank raised its year-end S&P 500 target from 7,600 to 8,000 late Tuesday, citing sustained strong earnings growth despite some geopolitical headwinds.