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Wall Street's Equity Benchmarks Close Out May at Record Highs

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Wall Street's Equity Benchmarks Close Out May at Record Highs

US equity benchmarks reached new peaks on Friday, buoyed by a rally in technology stocks, while Wall Street logged its second consecutive monthly gains.

The Dow Jones Industrial Average rose 0.7% to 51,032.5, while the S&P 500 added 0.2% to 7,580.1. The Nasdaq Composite gained 0.2% to 26,972.6. All three indexes notched back-to-back closing highs.

Barring technology and financials, all sectors were in the red, led by consumer staples.

Dell Technologies (DELL) shares surged nearly 33%, the best performer on the S&P 500. Late Thursday, the company reported record fiscal first-quarter results that surpassed Wall Street's estimates amid a surge in demand for artificial intelligence-optimized servers. It raised its fiscal 2027 outlook.

Dell is in a "strong" position to continue to outperform amid the ongoing AI infrastructure buildout, Wedbush Securities said in a note.

NetApp (NTAP) jumped 22% after announcing its quarterly results, the second-biggest gainer on the S&P 500.

Other tech names that showed notable gains included IBM (IBM), which advanced nearly 13%, Salesforce (CRM), and Microsoft (MSFT).

SentinelOne (S) shares slumped 8.3%. The cybersecurity company delivered a solid first-quarter performance that appears to be sustainable amid strong underlying trends, BofA Securities said in a Friday client note.

The brokerage attributed the sell-off to the company's "conservative" guidance that raises questions around growth durability. But BofA views the pullback as an attractive entry point for investors, citing underlying momentum.

This month, the Nasdaq gained 8.4%, the S&P 500 climbed 5.1%, and the Dow advanced 2.8%.

"Markets have largely decided to move on from the conflict with Iran," said Douglas Porter, chief economist at BMO Financial Group.

West Texas Intermediate crude oil was down 1% at $88.04 a barrel in Friday late-afternoon trade, while Brent fell 1.8% to $91.99. The benchmarks were on track for monthly declines following four consecutive monthly gains.

"The market has increasingly priced in a resolution (to the US-Iran conflict) this week," ING Bank said in a report Friday. "Therefore, any confirmation of a deal that reopens the strait means that significant further downside is likely limited, particularly during the early stages of a ceasefire."

In a social media post Friday, US President Donald Trump said he was heading to the White House Situation Room "to make a final determination" regarding the Middle East conflict. He also announced an end to the naval blockade of Iranian ports.

Trump said that Iran must permanently forgo capabilities that lead to nuclear weapon development and allow unrestricted shipping traffic through the Strait of Hormuz.

Axios reported Thursday that the US and Iran had agreed to a memorandum of understanding to extend a ceasefire between the countries and begin talks on Tehran's nuclear program. However, Trump hadn't signed off on the deal, according to the report.

US Treasury yields were mixed in Friday late-afternoon trade, with the 10-year rate little changed at 4.44% and the two-year rate falling 2.3 basis points to 4.01%.

A sharp jump in Treasury yields following the Middle East conflict is unlikely to dampen investor appetite for equities, given corporate earnings growth and excitement surrounding artificial intelligence, Wells Fargo Investment Institute said in a note.

Two Federal Reserve officials offered mixed views on whether the oil price shock could be considered transitory, with Michelle Bowman in favor of looking through such developments and Jeffrey Schmid saying inflation is too hot to ignore.

Gold was last up 0.9% at $4,574.50 per troy ounce, while silver fell 0.1% to $75.81 per ounce.

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Dell in 'Strong' Position to Continue to Outperform Amid AI Infrastructure Buildout, Wedbush Says
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Dell in 'Strong' Position to Continue to Outperform Amid AI Infrastructure Buildout, Wedbush Says

Dell Technologies (DELL) is in a "strong" position to continue to outperform amid the ongoing artificial intelligence infrastructure buildout, Wedbush Securities said in a note.Late Thursday, the computer maker raised its fiscal 2027 outlook after posting record first-quarter results that surpassed Wall Street's estimates amid a surge in demand for AI-optimized servers. The company secured $24.4 billion in AI orders and reported $16.1 billion of AI server revenue.Dell shares were up 32% in Friday late-afternoon trade, stretching its year-to-date gains to nearly 231%."With over 5,000 AI server customers and continued conversations around price increases from supply constraints through (the second half of 2027, Dell has) a strong position to continue outperforming within the AI infrastructure buildout," Wedbush analyst Dan Ives said in a note e-mailed late Thursday. "Inference workloads are driving higher demand for traditional compute, and Dell is capitalizing on a new refresh opportunity on the horizon."The company continues to see "exceptionally strong" opportunity in AI amid robust demand, Chief Operating Officer Jeff Clarke said on an earnings conference call, according to a FactSet transcript."We exited the quarter with a record $51.3 billion of AI backlog, and our pipeline continued to grow sequentially, and remains multiples of our backlog even after converting $24.4 billion into orders," Clarke said. "Demand continues to exceed supply with memory as the primary constraint. And we expect to exit the year with meaningful backlog."Dell's new full-year revenue outlook calls for $165 billion to $169 billion. This includes $60 billion of AI-optimized server revenue, Chief Financial Officer David Kennedy said on the call."The AI infrastructure buildout is now moving beyond solely (graphics processing units), with demand for (central processing units) and now servers accelerating and outstripping existing supply, with more customers looking to refresh compute environments to support growing AI workloads," Ives said.Price: $416.93, Change: $+99.88, Percent Change: +31.50%

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Further Air Travel Slowdown Could Put Aftermarket Spending at Risk, RBC Says
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A further deceleration in global air travel demand could put aftermarket spending at risk if airlines opt to slash capacity amid the ongoing Middle East conflict, RBC Capital Markets said in a note e-mailed Friday.The International Air Transport Association said Thursday that global passenger demand fell 3.4% year over year in April, marking the first annual contraction since the post-pandemic recovery.Excluding the Middle East, which saw a nearly 47% slump, overall demand rose 1.2% last month. Total capacity dropped 2.9%, according to the IATA report.The IATA expects global scheduled seat capacity to fall 1.1% year over year this month, compared with a 0.8% drop seen in April. Middle East capacity is seen tumbling 27% in May, according to the report.Despite some airlines flagging capacity cuts amid elevated oil prices, overall views on the demand backdrop have been "relatively robust," RBC analyst Ken Herbert said in a note to clients."We believe the key focus for investors remains the durability of travel demand as airfares increase, as a further deceleration in demand poses a risk to aftermarket spending if more meaningful capacity cuts materialize," Herbert wrote.Overall, the brokerage continues to be "bullish" on the commercial aftermarket industry this year. RBC continues to recommend FTAI Aviation (FTAI), Heico (HEI), Loar (LOAR) and VSE (VSEC) as "high conviction" stocks for aftermarket exposure, particularly engine maintenance, repair, and overhaul, or MRO, according to the note."We expect more upside potential in engine MRO as we expect it to continue outpacing component MRO growth in 2026, but we appreciate that focus is shifting to 2027," Herbert said. Air carriers are expected to be cautious in retiring legacy engines amid factors such as a lack of new supply, according to the note."We continue to see a tight engine (aftermarket), limited retirements/(used serviceable material), and an unprecedented concentration of value in the engine (aftermarket) relative to the broader aero market," Herbert said. "We remain focused on any potential (aftermarket) parts de-stocking from airlines in 2026, as we have not seen significant de-stocking through 2025."Price: $256.90, Change: $-5.88, Percent Change: -2.24%

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Fed's Bowman Supports Looking Through Oil Shock; Schmid Views Inflation as Too Hot
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