Key keywords: chip stocks, Iran peace talks, Wall Street record highs, semiconductor sector performance, US stock market rally, geopolitical risk easing, Federal Reserve rate cut expectations, Nasdaq composite surge Wall Street is poised to notch new all-time highs this week, driven by two major catalysts: a blistering rally in semiconductor shares and growing optimism around ongoing Iran peace talks that could ease global geopolitical and inflation pressures. The semiconductor sector, which has led the 2024 US stock market upswing on the back of explosive artificial intelligence (AI) demand, extended gains on Wednesday, with the PHLX Semiconductor Index climbing 3.2% in intraday trading to hit a fresh record. Leading chipmakers posted double-digit year-to-date gains: Nvidia Corp rose 2.1% to trade above $950 per share, Advanced Micro Devices Inc jumped 4.3% on better-than-expected quarterly data center chip sales, and Taiwan Semiconductor Manufacturing Co gained 2.8% after raising its full-year revenue forecast on booming AI chip orders. Industry analysts noted that the current semiconductor upcycle is far from peaking, as global tech giants continue to ramp up capital spending on AI infrastructure, with projected global AI chip demand set to rise 45% in 2024 alone. Parallel to the chip stock surge, positive updates from indirect Iran-US peace talks mediated by Oman have boosted market sentiment. Sources close to the negotiations confirmed that both sides are close to reaching a temporary agreement that would limit Iran’s nuclear enrichment activities in exchange for partial relief from US oil sanctions. If finalized, the deal would add an estimated 1.5 million barrels of Iranian crude oil to global markets per day, pushing down international oil prices by 7% to 10% according to energy sector estimates. Lower oil prices would directly ease US headline inflation, which has remained sticky above the Federal Reserve’s 2% target in recent months, clearing the path for the Fed to implement up to three 25-basis-point interest rate cuts in the second half of 2024. As of Wednesday’s midday trading, the S&P 500 was up 0.8% to 5,287, on track for its 16th record close this year, while the Nasdaq Composite gained 1.4% to 16,722, also approaching a new all-time high. Data from the Investment Company Institute showed that $12.7 billion flowed into US equity funds last week, with 62% of the inflows directed to tech and semiconductor-focused funds. While some analysts warn of short-term correction risks given stretched valuations in parts of the semiconductor sector, broad market sentiment remains overwhelmingly bullish, with 78% of fund managers surveyed by Bank of America expecting US stocks to hit new highs before the end of 2024.