AI Optimism and Easing Iran Tensions Drive U.S. Stocks to Record Highs
Stocks ended the week at record highs as investors bet that tensions between the United States and Iran could ease, while enthusiasm for artificial intelligence spending continued to lift equities. The S&P 500’s rally, combined with a softer oil backdrop, also helped Treasuries recover some of the losses they had suffered since the conflict began.
According to Bloomberg’s markets wrap, hopes for a ceasefire or broader deal that could end the Iran conflict powered a historic run of weekly gains in U.S. stocks. The benchmark index closed at a fresh record on Friday, extending a winning streak that traders linked to both peace-deal optimism and confidence that AI-related capital spending will keep driving corporate earnings growth.
The move was not limited to equities. U.S. government bonds also advanced on the week, with Bloomberg reporting that Treasuries trimmed earlier war-related losses as oil prices fell on expectations that an agreement could emerge. That decline in oil prices mattered because it eased one of the main inflation risks tied to the conflict and helped improve sentiment across rate-sensitive markets.
Other asset classes reflected the shifting outlook as well. Gold gave back some of its earlier gains as traders weighed conflicting signals about whether a U.S.-Iran truce was close, according to Bloomberg. The metal had benefited from uncertainty, but the prospect of lower geopolitical tension reduced some of that demand.
The week also brought an economic reminder of how trade and the AI boom are shaping markets at the same time. Bloomberg Economics reported that the U.S. merchandise-trade deficit narrowed in April as record exports in a category including oil and petroleum products offset a continued surge in imports of capital goods tied to artificial intelligence investment. That combination underscores how energy flows, war risk and AI-related spending are increasingly moving markets together, with investors now watching both the diplomacy around Iran and the durability of the AI trade for what comes next.