The S&P 500 closed at a record high on Tuesday, while the tech-heavy Nasdaq eked out further gains, as AI-fueled optimism offset worries over Middle East peace talks, fueled by recent US strikes on Iran. Semiconductor stocks, which have soared on AI-driven demand, rallied, with Micron rising sharply, hitting $1 trillion in market value for the first time since UBS raised its price target on the stock to $1,625 from $535.

As buoyant earnings and renewed confidence in the AI ​​business have boosted U.S. equities despite the ongoing conflict with Iran, investors are now eyeing the IPOs of some of the biggest private AI companies, including SpaceX.

“For those of us who have been around this long, the tech rallies we’ve seen this year are reminiscent of the boom of the late 1990s,” said Chris Zachrelli, chief investment officer at Northlight Asset Management.

“It’s also possible that some of the lessons learned after the tech bubble burst 25 years ago will prevent the same thing from happening again.” The US Markets were comforted by comments from Secretary of State Marco Rubio, who said a deal with Tehran to end the conflict “could take a few days,” while Iran’s Tasnim news agency reported that Tehran wanted to release $24 billion in Iranian funds frozen abroad.

“Although we do not have an end to the war yet, there is a very high probability that the situation will be resolved peacefully sooner rather than later,” said Adam Sarhan, chief executive of 50 Park Investments.

“But the reality is that earnings are expected to rise even with high inflation. The economy is still growing, and the market is a mirror of the economy at large.”

In early data, the S&P 500 gained 46.00 points, or 0.62%, to close at 7,519.47, while the Nasdaq Composite added 311.92 points, or 1.18%, to 26,655.89. The Dow Jones Industrial Average was down 106.60 points, or 0.21%, at 50,473.10.

The S&P 500, Nasdaq and Russell 2000 all touched intraday record highs on Tuesday, underscoring the strength of the recent rally.

The US Brent crude futures rose nearly 4% on Tuesday after the military struck Iran, adding to uncertainty about whether a deal will soon be reached to end the war and reopen shipping flows through the Strait of Hormuz. Qualcomm rose after Bloomberg News reported it struck a deal with TikTok owner ByteDance to supply chips, while Marvell Technologies ended higher. The Philadelphia SE Semiconductor Index hit an all-time high.

With earnings season winding down, first-quarter earnings growth is expected to be 29% year-on-year, compared with 16.1% estimated a month ago, according to LSEG data on Friday.