AMD's Surge and an Iran Deal Spark the Nasdaq 100's Record-Breaking Day

A rare convergence of US-Iran peace talks, strong chipmaker earnings, and a historic Fed dissent drove the Nasdaq 100 to an all-time high, while crude oil plunged 7.8%.

A rare convergence of events—a potential US-Iran peace agreement, blockbuster earnings from chipmakers, and an unusual split within the Federal Reserve—catapulted the Nasdaq 100 to an all-time high on Wednesday. The index closed at 28,491 points, up 1.70 percent, while the broader S&P 500 gained 1.46 percent to 7,365 points. The Dow Jones industrials added roughly 612 points.

The session was marked by a dramatic plunge in crude oil, which fell more than 7 percent after Axios reported that the US and Iran were nearing a deal that would include a moratorium on uranium enrichment. Brent crude settled at $101.27 a barrel, a drop of 7.8 percent. Energy stocks were the worst-performing sector in the S&P 500, losing 4.2 percent on the day.

The slide in oil prices dragged down inflation expectations, sending the yield on 10-year US Treasuries to a weekly low of 4.33 percent. That provided a significant tailwind for growth-oriented technology stocks, which benefit from lower discount rates on future cash flows. The VIX, Wall Street's fear gauge, fell nearly 5 percent to 17.38, and trading volume in the Nasdaq 100 ran about 15 percent above its 20-day average. A total of 160 new 52-week highs on the Nasdaq underscored the breadth of the rally.

Advanced Micro Devices delivered the session's most powerful single-stock catalyst. The chipmaker reported first-quarter revenue of $10.25 billion, with its AI data-center business growing 57 percent year over year. Shares surged 18.4 percent to $420.53. The momentum rippled across the semiconductor sector. Super Micro Computer jumped 24.5 percent after forecasting fourth-quarter earnings per share between 65 and 79 cents, well above the 55-cent consensus estimate. Corning climbed 17 percent on news of a partnership with Nvidia for optical manufacturing equipment, while Nvidia itself rose 5.9 percent as investors looked ahead to its quarterly report on May 20.

Not all tech names participated in the rally. Arista Networks fell nearly 12 percent after reporting an adjusted gross margin of 62.4 percent for the first quarter, just shy of the 62.7 percent analysts had expected. Walt Disney, however, gained about 4 percent following its own quarterly results.

Cyclical stocks also benefited from the drop in oil prices. Royal Caribbean advanced 8.8 percent, and United Airlines rose 6.8 percent, both on expectations of lower fuel costs.

The monetary policy backdrop added an unusual layer of drama. Four members of the Federal Reserve's rate-setting committee voted against the decision to hold rates steady at 3.50 to 3.75 percent—the most dissenting votes since late 1992. Fed Chair Jerome Powell plans to remain as a regular member of the Board of Governors after his term ends on May 15. His likely successor, Kevin Warsh, is expected to chair the FOMC meeting on June 16-17, which will include new rate projections. SoFi CEO Anthony Noto has predicted that a Warsh-led Fed would deliver more rate cuts this year.

The CME FedWatch Tool showed just a 12 percent probability of a rate cut later this year at the start of trading Wednesday. The odds of a rate increase above current levels had briefly reached nearly 30 percent but have since fallen back to around 13 percent.

Technically, the Nasdaq 100 is showing signs of overheating. The 14-day relative strength index closed at 82.2, deep in overbought territory. Historically, such readings often precede short-term consolidation. Still, the index remains comfortably above its 50-day moving average of 27,606 points and its 200-day average of 25,864 points. The next psychological milestone sits at 29,000 points, with immediate support at Wednesday's opening gap near 28,234 points and a stronger floor around 27,600.

The QQQ ETF, the most liquid proxy for the Nasdaq 100, closed at a 52-week high of $688.52. It was little changed in pre-market trading Thursday at roughly $687.60.

The next major catalyst arrives Friday with the US employment report for April. The data could reshape rate expectations and determine how much room Warsh will have to maneuver at his first FOMC meeting.