The Nasdaq Composite closed at a record high on Tuesday as gains in AI-related stocks helped lift the tech-heavy index, while the S&P 500 ended little changed and the Dow Jones Industrial Average fell.
The Nasdaq rose 0.45% to 27,244.28, marking its first record close since June.
The S&P 500 slipped 0.01% to 7,764.27, while the Dow fell 185 points, or 0.36%, to 51,863.89.
Investors continued to monitor developments between the US and Iran, while oil prices extended their declines and Treasury yields remained below 5%.
AI stocks lift Nasdaq to record
Chip stocks were among the strongest performers, with Micron Technology and SanDisk gaining as investors continued to focus on demand for AI-related hardware.
SanDisk shares rose nearly 7% following a bullish call from Rosenblatt, while Micron also advanced.
The gains added to a recent rally in AI-related stocks.
The broader technology sector was more mixed, however, as some consumer-focused companies came under pressure amid concerns about Meta Platforms’ Muse AI assistant.
Muse, which launched earlier this month, can perform tasks such as sending emails and completing transactions on behalf of users.
Amazon blocked the AI agent from shopping on its platform on Monday.
Shares of Uber Technologies, Lyft, Expedia and Charles Schwab fell during Tuesday’s session as investors assessed the potential impact of increasingly capable AI agents on consumer-facing businesses.
The S&P 500 remained less than 1% below its August 13 record close.
According to LSEG data, the index was trading at just under 19 times expected earnings, its lowest valuation since 2023.
Oil prices extend five-day decline
Oil prices fell for a fifth consecutive session as investors assessed developments involving Iran and Saudi Arabia.
Brent crude futures settled 1.09% lower at $99.25 a barrel, while US crude futures fell 1.24% to $94.59. Prices had fallen more than $2 a barrel at their session lows.
Oil declined earlier in the session after reports that Iran had offered to reopen the Strait of Hormuz within seven days.
Saudi Arabia was also reportedly preparing to restart its East-West pipeline as early as this week. The developments added to expectations that supply disruptions could ease.
Trump said US officials had held a three-hour meeting with Iran’s delegation and described it as very good.
However, he also said he had a major decision to make regarding whether to pursue a deal with Iran.
The Strait of Hormuz remains a key focus for energy markets because it handled about one-fifth of global oil and liquefied natural gas supplies before the conflict began in late February.
Treasury yields and Fed outlook in focus
The yield on the 10-year US Treasury note traded around 4.95% on Tuesday after declining during the previous session.
Treasury yields have remained elevated as investors assess inflation, oil prices and rising government debt.
Markets are also assessing the outlook for Federal Reserve policy after the central bank raised its key interest rate by 25 basis points last week.
CME Group’s FedWatch Tool showed traders pricing a 53% chance of another 25-basis-point rate increase in October.
Investors are also looking ahead to a planned US-China summit in Washington on Thursday. Discussions are expected to cover trade, artificial intelligence, tariffs and rare earth metals.