Nasdaq hits record high on Alphabet gains and Middle East negotiation hopes

The tech-heavy Nasdaq hit a record intraday high for the first time since early June on Tuesday, supported by strong gains in Alphabet, the parent company of Gemini AI, while optimism over potential talks between the United States and Iran lifted broader market sentiment.

The Dow Jones Industrial Average fell 57.87 points, or 0.11%, to 51,990.96, while the S&P 500 rose 5.59 points, or 0.07%, to 7,770.29. The Nasdaq Composite gained 109.38 points, or 0.40%, to 27,231.48.

A senior Iranian official told Reuters that Tehran could reopen the Strait of Hormuz within seven days if the United States eases pressure, while Saudi Arabia has also resumed operations on its East-West pipeline, according to three sources.

Talks between the United States and Iran are expected on the sidelines of the United Nations General Assembly meetings this week, followed by a US-China summit on Thursday. Traders hope the diplomatic efforts could lead to a resolution of the conflict in the Middle East and an extension of the trade truce with Beijing.

US President Donald Trump is also scheduled to meet several world leaders later in the day.

Magnificent Seven stocks in focus

Alphabet shares rose 2%, helping lift the S&P 500 communication services sector by 1.2%. Meta gained 0.5%, adding to its 11% surge on Monday, as investors bet that the company’s new Muse AI agent could open up a new revenue stream for the social media giant, analysts said.

Other members of the Magnificent Seven, including Apple and Tesla, also edged higher.

Chipmakers, however, retreated after being among the biggest beneficiaries of the artificial intelligence trade this year. Texas Instruments fell 1%, Broadcom declined 0.6%, while Nvidia was little changed.

Federal Reserve officials view AI-related demand and the oil price shock as key factors driving inflation. Traders currently see a 53.1% probability that the central bank will raise interest rates by at least 25 basis points in October, following this month’s increase, according to CME Group’s FedWatch Tool.

Boston Federal Reserve President Susan Collins wrote that she supported the central bank’s interest rate increase last week amid the risk that inflation could remain above its 2% target going forward.

At least three Federal Reserve officials are expected to speak later in the day: Federal Reserve Vice Chair Philip Jefferson, New York Fed President John Williams and Richmond Fed President Thomas Barkin.

Among other stocks, Amgen rose 2.3% after the drugmaker said its experimental treatment for Sjögren’s disease met the primary goal of reducing disease activity in a late-stage clinical trial.