(Recasts with preliminary close of trading, adds market details)

* Intel ( INTC ) shares hit record after upbeat Q2 forecast

* Justice Department to end probe into Powell

* Semiconductor index notches 18th straight session of

gains

By Chuck Mikolajczak and Niket Nishant

NEW YORK, April 24 (Reuters) - The S&P 500 and Nasdaq

closed at record highs on Friday, bolstered by optimism for

potential negotiations between the U.S. and Iran to end their

war and a surge in Intel ( INTC ) shares that extended the rally in

semiconductor stocks.

Pakistani government sources said Iran's foreign minister,

Abbas Araqchi, was expected in the Pakistani capital, Islamabad,

on Friday to discuss proposals for restarting peace talks.

In addition, White House Press Secretary Karoline Leavitt said

in an interview with Fox News that President Donald Trump's

special envoy Steve Witkoff and son-in-law Jared Kushner will

travel to Islamabad on Saturday morning for talks with Iran

mediated by Pakistan.

Markets had rallied in recent weeks on hopes that a

resolution to the Iran war was on the horizon, along with

expectations of strong corporate earnings, but gains have been

tempered this week as optimism for a peace deal dimmed, with the

Strait of Hormuz remaining shuttered.

"The Iran thing feels kind of tenuous, we've had a lot of

back and forth. I assume that will continue, but for now, some

rays of sunlight," said Jed Ellerbroek, portfolio manager at

Argent Capital Management in St. Louis, Missouri.

According to preliminary data, the S&P 500 gained

56.33 points, or 0.79%, to end at 7,164.73 points, while the

Nasdaq Composite gained 395.35 points, or 1.61%, to

24,833.86. The Dow Jones Industrial Average fell 83.25

points, or 0.17%, to 49,221.11.

Semiconductors, one of the market's strongest performers on

the year, continued to rally. The Philadelphia SE Semiconductor

Index advanced to extend its record run of gains to 18

consecutive sessions.

Intel ( INTC ) hit a record high and was the best performer on

the benchmark S&P index, following a better-than-expected

revenue forecast for the second quarter.

"All the doubts and fears about the (return on investment)

on the AI CapEx from the big tech companies - Amazon ( AMZN )

and Google and Microsoft ( MSFT ) and Meta - those

concerns are fading real fast, and that's propelling the chip

stocks and the contractors and all the industrial companies,"

said Ellerbroek.

Fellow chipmakers AMD and Arm also shot

higher.

The S&P 500 technology index was the best-performing

of the 11 major S&P sectors. Tech stocks also managed to shrug

off DeepSeek's preview of its highly awaited new model.

The S&P 500 and the Nasdaq recorded a fourth consecutive

week of gains, their longest streak since the fourth quarter of

2024. The Dow, however, snapped a three-week run higher.

FED MEETING AWAITED

Attention is also shifting to the Federal Reserve meeting

next week, which will be scrutinized for clues on rate cuts and

the central bank's leadership succession.

The U.S. Justice Department is closing its investigation into

Fed Chair Jerome Powell, clearing an obstacle to the

confirmation of Kevin Warsh, Trump's pick to lead the central

bank.

Markets were pricing in a roughly 39% chance for a cut of at

least 25 basis points at the Fed's December meeting, according

to CME's FedWatch Tool, up from about 23% in the prior session.

A strong start to earnings season has helped buttress stocks

against volatile Iran news. Earnings growth expectations for the

first quarter now stand at 16.1%, according to LSEG data, up

from 14.4% at the start of April.