* Indexes up: Dow 1.04%, S&P 500 1.13%, Nasdaq 1.56%

* Chip stocks gain after AMD's upbeat forecast

* Oil prices down on reports of progress in US-Iran talks

(Updates with afternoon trading)

By Niket Nishant and Utkarsh Hathi

May 6 (Reuters) - The S&P 500 and the Nasdaq hit record

highs on Wednesday, buoyed by signs of a resolution in the

Middle East conflict, while strong earnings from Advanced Micro

Devices ( AMD ) sparked a rally in chipmakers.

Advanced Micro Devices' ( AMD ) shares rose nearly 17% to a

record high after the company forecast second-quarter revenue

above expectations on robust demand for its data-center chips.

Shares of rival Intel ( INTC ) jumped 2.4%, while a broader

gauge of U.S. chipmakers climbed 3.5% to a fresh peak on

continued optimism around AI demand.

Global stocks surged and oil prices slumped following

reports that the United States and Iran were closing in on an

agreement for a one-page memorandum to end the war in the Gulf

region. Iran said it was reviewing a new U.S. proposal.

In its current form, the memorandum would declare an end to

the conflict and the start of a 30-day period of negotiations on

a detailed agreement to open the Strait of Hormuz, limit Iran's

nuclear program and lift U.S. sanctions, Axios reported.

Oil prices fell below $100 a barrel for the first time since

April 22, helping ease concerns about inflationary pressures.

"The market is responding to the de-escalation

optimistically, on top of a strong earnings season," said Josh

Chastant, managing director, public markets at GuideStone Funds.

U.S. stock markets have remained resilient in recent weeks

even as diplomatic efforts to end the conflict have failed to

produce a breakthrough, with investors instead focusing on the

earnings season. S&P 500 companies are on track for their

highest profit growth in more than four years.

Of the 314 S&P 500 companies that reported through May 1,

83% beat analysts' profit estimates, according to LSEG I/B/E/S

data.

At 12:30 p.m., the Dow Jones Industrial Average

rose 510.85 points, or 1.04%, to 49,809.10, the S&P 500

gained 82.14 points, or 1.13%, to 7,341.36 and the Nasdaq

Composite gained 395.68 points, or 1.56%, to 25,717.84.

U.S. private payrolls posted their largest increase in 15

months in April, pointing to continued labor market stability

even as the conflict in the Middle East clouds the economy's

outlook.

Investors are awaiting the more comprehensive non-farm

payrolls report on Friday, with U.S. jobs seen increasing by

62,000 in April after rebounding 178,000 in March, according to

a Reuters survey of economists.

Meanwhile, St. Louis Federal Reserve President Alberto

Musalem said the risks to monetary policy have shifted towards

higher inflation, possibly requiring interest rates to stay on

hold for some time amid a seemingly stable job market.

Traders expect the U.S. Federal Reserve to keep rates on

hold until the end of 2026.

Among other movers, Walt Disney rose 6.7% after the

entertainment firm beat estimates for second-quarter results and

as investors got a glimpse of CEO Josh D'Amaro's growth strategy

for the company.

Uber Technologies gained 7.7% after the ride-hailing and

delivery platform forecast strong second-quarter bookings.

Hut8 soared 32.5% after the AI data center developer

said it had signed a 15-year lease worth $9.8 billion for its

Beacon Point data center campus in Texas.

Super Micro soared 15.6% following a

stronger-than-expected forecast for fourth-quarter revenue and

adjusted profit.

Advancing issues outnumbered decliners by a 2.46-to-1 ratio

on the NYSE and by a 1.89-to-1 ratio on the Nasdaq.

The S&P 500 posted 40 new 52-week highs and 14 new

lows while the Nasdaq Composite recorded 158 new

highs and 73 new lows.

(Reporting by Niket Nishant and Utkarsh Hathi in Bengaluru;

Editing by Pooja Desai, Arun Koyyur and Anil D'Silva)