U.S. stocks extended their winning streak to a fourth day on Tuesday. Investors remained optimistic about a potential deal between the U.S. and Iran to reopen the Strait of Hormuz, despite tensions testing the ceasefire.

The S&P 500 closed 0.6% higher, setting a new record, with chipmakers leading the gains.

The tech-heavy Nasdaq 100 Index surged 1.8%, also reaching a record high. The Dow Jones Industrial Average edged down 0.2%.

Micron Technology shares soared 19%, pushing its market value above $1 trillion, after UBS raised its price target to $1,625.

Auto parts retailer AutoZone saw its stock plunge, ranking as the worst performer in the S&P 500, after reporting third-quarter sales that missed expectations.

Space and satellite-related stocks surged as investor enthusiasm for the sector heated up following SpaceX's filing for a public offering last week.

The U.S. administration is heavily promoting progress toward a ceasefire agreement. Former President Trump stated that negotiations with Iran regarding extending the ceasefire and reopening the Strait of Hormuz are advancing. Secretary of State Rubio indicated it might take several days to finalize a deal.

Kyle Rodda of Capital.com said, "Market participants are betting on peace and buying into very strong stock fundamentals."

Tom Essaye of The Sevens Report noted that traders should not expect a deal to immediately propel the S&P 500 to 8,000 points. However, removing such an overhang allows investors to focus on earnings and growth, enhancing market potential. He added, "While a ceasefire won't act as an immediate catalyst, as long as economic growth remains solid and inflation doesn't spike, it will still have a steady positive impact on stocks and bonds."

Data showed a slight dip in U.S. consumer confidence in May, as the war in Iran pushed prices higher, dampening consumers' assessment of current economic conditions. The Conference Board's Consumer Confidence Index fell to 93.1, while the previous month's figure was revised upward. The median estimate was 92.

Jeffrey Roach of LPL Financial commented, "Given the current price pressures, we expected a more severe drop in confidence. However, consumers believe the employment situation will improve by year-end."

At the close: The S&P 500 was up 0.6% at 7,519.12. The Dow Jones Industrial Average was down 0.2% at 50,461.68. The Nasdaq Composite Index was up 1.2% at 26,656.18. The Nasdaq 100 Index was up 1.8% at 30,001.32. The Russell 2000 Index was up 1.8% at 2,920.54.