U.S. stocks closed higher on Friday, with the Dow Jones Industrial Average finishing above 51,000 points for the first time. The three major stock indices all reached new record highs, capping off a month of substantial gains in May. Meanwhile, crude oil prices declined as traders closely monitored the Middle East conflict and the fragile ceasefire agreement between Iran and the United States.
The Dow Jones Industrial Average rose by 363.49 points, or 0.72%, to close at 51,032.46. The Nasdaq Composite gained 55.15 points, or 0.20%, ending at 26,972.62. The S&P 500 increased by 16.43 points, or 0.22%, settling at 7,580.06.
For the week, the Dow advanced 0.9%, the Nasdaq climbed 2.39%, and the S&P 500 rose 1.43%. Over the course of May, the Dow accumulated a gain of 2.78%, the Nasdaq surged 8.36%, and the S&P 500 increased by 5.15%.
Oil prices fell on Friday after the U.S. President indicated he might soon make a decision regarding an agreement with Iran. This month, U.S. crude prices have plummeted approximately 17% as markets held out hope for a potential deal between the U.S. and Iran. However, on Friday, the President laid out a series of demands that Iran has previously been unwilling to accept.
On Friday, U.S. West Texas Intermediate crude fell 1.73% to settle at $87.36 per barrel. The international benchmark Brent crude declined 1.77% to close at $92.05 per barrel.
In a social media post, the President stated, "I will now be meeting in the Situation Room to make the final decision." He also presented demands to Iran, stating that Tehran must agree never to possess nuclear weapons. He said Iran must immediately allow unrestricted two-way passage through the Strait of Hormuz without charging tolls. Additionally, he insisted that Iran must agree to clear any remaining mines from the Strait of Hormuz.
The President further demanded that Iran agree to allow the United States to excavate and destroy its enriched uranium buried under the rubble from last year's U.S.-Israel airstrikes.
This development followed reports from U.S. officials on Thursday, who informed media that negotiators from both sides had finalized a 60-day memorandum of understanding to extend the ceasefire and initiate talks on Iran's nuclear program. Officials noted that the memorandum still required the President's signature.
However, Kate Moore, Chief Investment Officer at Citi Global Wealth, suggested that the market's momentum to new highs is likely driven more by strong corporate earnings growth than by headlines concerning Middle East tensions.
She stated, "I think a significant portion of the rally since the March lows is due to the market pricing in the expectation that a resolution will eventually be found, but clearly, the scope and timing of that resolution remain unknown. I do believe the real driver pushing the market higher is the earnings strength in the tech sector... This earnings season has seen one company after another delivering such performances."
Shares of Dell Technologies surged after the laptop manufacturer raised its full-year guidance and reported first-quarter revenue and profit that exceeded expectations.
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