Dow rises 140 points as AI rally pushes S&P 500, Nasdaq toward records

• Micron Technology exceeded $1 trillion market capitalization as AI infrastructure spending fueled a broader semiconductor rally, with UBS citing AI-linked supply agreements as a key catalyst
• Goldman Sachs raised its S&P 500 year-end target to 8,000 from 7,600, pointing to strong first-quarter earnings growth of approximately 29% year-over-year
• Markets are watching Thursday's PCE inflation release and potential Iran diplomatic resolution, with oil prices falling below $89 per barrel on reports of restored Strait of Hormuz shipping commitments

Market Summary: AI Rally Drives Indices Higher

Market Performance:

U.S. equities opened higher Wednesday, with the Dow Jones Industrial Average gaining approximately 147 points. The S&P 500 and Nasdaq Composite each rose nearly 0.07%, building on Tuesday's record-setting session when the S&P 500 climbed 0.61% and the Nasdaq surged 1.19% to fresh all-time highs.

Key Developments:

Micron Technology (MU) reached a historic milestone, surpassing $1 trillion in market capitalization for the first time, driven by AI infrastructure optimism. UBS upgraded its outlook on Micron, citing AI-linked supply agreements as a significant growth catalyst. The semiconductor and technology sectors continued leading market momentum as investors bet on sustained earnings growth from AI-related capital expenditures.

Goldman Sachs raised its year-end S&P 500 target to 8,000 (from 7,600), pointing to robust corporate earnings growth of approximately 29% year-over-year in Q1.

Geopolitical Factors:

U.S.-Iran tensions remained a focus, though diplomatic progress appears possible. President Trump indicated negotiations are "proceeding nicely," while Secretary of State Marco Rubio suggested an agreement could emerge within days. Oil prices fell below $89 per barrel after Iran committed to restoring commercial shipping through the Strait of Hormuz within one month.

Upcoming Catalysts:

Investors await Thursday's release of the Personal Consumption Expenditures (PCE) index—the Federal Reserve's preferred inflation gauge—which could influence policy expectations under new Fed Chair Kevin Warsh. Money markets currently anticipate unchanged interest rates for most of 2026, though some traders price in potential rate increases later in the year.

Market Implications:

The AI-driven rally continues supporting technology valuations, with semiconductor stocks particularly benefiting from infrastructure spending tailwinds and strong earnings momentum.