Quick overview

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U.S. stocks closed higher on Friday, capping off an exceptional month for financial markets. All three major indexes reached fresh record highs and completed a ninth consecutive week of gains, supported by easing geopolitical concerns, a strong earnings season, and growing optimism about the economic outlook.

The Dow Jones Industrial Average rose 0.72% to 51,032.65, while the S&P 500 gained 0.24% to close at a record 7,581.65. The tech-heavy Nasdaq Composite advanced 0.21% to 26,972.62.

The monthly performance was equally impressive. In May, the Dow gained 2.8%, the S&P 500 climbed 5.2%, and the Nasdaq surged 8.3%, marking one of the strongest months for U.S. equities in recent years.

Middle East optimism boosts risk appetite

Investor sentiment was supported by expectations that the United States and Iran could reach an agreement to ease tensions in the Middle East and restore unrestricted shipping through the Strait of Hormuz, a critical route for global energy trade.

U.S. President Donald Trump said negotiations were progressing and that he was reviewing the final terms of a potential deal, a development investors viewed as positive for regional stability.

The prospect of reduced geopolitical risks encouraged buying across equity markets, particularly in sectors tied to economic growth.

Oil prices decline

Signs of diplomatic progress also weighed on energy prices.

Brent crude futures fell 2.6% to $91.33 per barrel, while U.S. benchmark WTI crude declined 2.4% to $86.69. Both contracts were on track for their largest weekly drop since early April.

Despite the pullback, oil prices remain well above pre-conflict levels and continue to fuel concerns about inflationary pressures worldwide.

Dell leads AI-driven gains

Among individual stocks, Dell Technologies stood out, soaring more than 33% after raising its revenue and profit forecasts, citing strong demand tied to artificial intelligence infrastructure.

The upbeat outlook lifted the broader technology sector. Super Micro Computer jumped 11.6%, while Hewlett Packard Enterprise gained 17.8% on expectations of continued growth in AI-related spending.

Okta also rallied nearly 30% after reporting quarterly revenue that exceeded market expectations.

On the downside, Gap Inc. fell 15.5% after cutting its full-year sales outlook, while Costco Wholesale slipped 3.9% despite reporting better-than-expected results.

Europe pushes for deeper capital market integration

Meanwhile, six of the European Union’s largest economies — Germany, France, Spain, Italy, Poland, and the Netherlands — called on Brussels to accelerate efforts toward a true Capital Markets Union.

The initiative aims to remove regulatory barriers and improve the flow of investment and savings across the bloc, a key strategic priority as Europe seeks to strengthen its competitiveness against the United States and China.

With stocks ending May at record highs, Wall Street’s rally remains supported by the expansion of artificial intelligence, improving economic expectations, and a declining perception of geopolitical risk.