The breakdown of negotiations between the United States and Iran has heightened tensions in the Middle East, with Iran announcing it will stop exchanging messages with the U.S. and threatening to completely close the Strait of Hormuz in retaliation for ceasefire violations. U.S. President Donald Trump appeared unconcerned by the collapse of talks, telling CNBC that he 'doesn't care' if negotiations fall apart and describing the process as 'very boring' [1]. This escalation led to a significant spike in oil prices: West Texas Intermediate futures rose more than 5% to close at $92.16 per barrel, while international benchmark Brent crude advanced over 4% to settle at $94.98 per barrel [1].
Despite the geopolitical turmoil and rising oil prices, U.S. equity markets closed at fresh highs, driven by optimism in the technology sector. Notably, Nvidia CEO Jensen Huang unveiled the RTX Spark superchip, developed in partnership with Microsoft, at the Computex conference in Taiwan. The chip, set to launch in the fall, is positioned as a 'reinvention' of the PC, with Huang emphasizing that agentic AI will run across all new computers equipped with the chip [1].
Further fueling AI enthusiasm, Anthropic confidentially filed its IPO prospectus, signaling a potentially historic share sale. The company reported explosive growth, with its revenue run rate soaring to $47 billion in May 2026, up from $10 billion in 2025. Anthropic recently closed a funding round at a $965 billion valuation [1]. SoftBank CEO Masayoshi Son added to the AI fervor, declaring the AI revolution '50 times bigger than the dot-com era' and announcing a €45 billion ($53 billion) investment to build AI infrastructure in France as part of a €75 billion program to develop 5 gigawatts of AI data center capacity in the country [1].
Despite the record highs in the S&P 500, only a handful of stocks—primarily in the AI sector—reached their own all-time highs, a pattern reminiscent of the dot-com bubble peak in 2000. Michael Hartnett of Bank of America commented that the 'speculative price action' is likely not over yet [1].
CONCLUSION
While the collapse of Iran-U.S. talks and the resulting spike in oil prices would typically unsettle markets, investor enthusiasm for AI and technology stocks has propelled U.S. indexes to new records. The market's focus remains firmly on AI-driven growth, overshadowing geopolitical risks for now.