(Updates closing indexes)

* Dell surges after raising full-year forecast

* Gap plunges after slashing sales forecast

* All three indexes end week and month higher

By Saeed Azhar, Twesha Dikshit and Utkarsh Shetti

NEW YORK, May 29 (Reuters) - Wall Street's main indexes

hit record closing highs on Friday and posted weekly and monthly

gains as Dell results drove tech shares higher, while investors

awaited details on a potential U.S.-Iran deal.

President Donald Trump said in a social media post that he would

make a final decision on the Iran deal on Friday. Tehran earlier

said it was looking for action, not words, when it came to an

agreement.

Dell surged after raising its full-year profit and

revenue forecasts on Thursday. The tech sector

climbed, fueled by gains in chip stocks.

Peers Hewlett Packard Enterprise ( HPE ) and Super Micro

Computer ( SMCI ) gained. Microsoft ( MSFT ) climbed.

The software services index also advanced.

Earlier in the session, all three indexes hit intraday

record highs, cruising on renewed optimism around AI and strong

earnings growth, despite concerns about the Iran war's impact on

inflation and the global economy.

According to preliminary data, the S&P 500

gained 16.11 points, or 0.21%, to end at 7,579.74 points,

while the Nasdaq Composite gained 53.74 points, or

0.20%, to 26,971.21. The Dow Jones Industrial Average

rose 363.48 points, or 0.72%, to 51,032.45.

EARNINGS-DRIVEN RALLY

"There's definitely euphoric sentiment in the market around

AI. The rally has really been driven by earnings," said Ohsung

Kwon, chief equity strategist at Wells Fargo.

He suggested investors buy and hold AI stocks, then earn

extra income by selling call options at prices much higher than

the current stock price.

Melissa Brown, head of investment decision research at

SimCorp, said over the past few weeks volume has gone up, which

suggests more people are coming into the market.

The S&P 500 was on track for a ninth consecutive weekly

gain, its longest winning streak since December 2023.

The S&P 500 communications services sector

dropped, as Alphabet declined.

Consumer staples shares were weak with heavyweights Costco

and Walmart ( WMT ) both down.

The S&P automaker index dropped after reports

the Trump administration wants North American-built vehicles to

have 82% regional content to qualify for preferential treatment

under the U.S.-Mexico-Canada Agreement.

Shares of General Motors ( GM ) and U.S.-listed shares of

Stellantis fell.

U.S. economic data on Thursday showed inflation increased at its

fastest pace in three years in April, while GDP for the first

quarter was revised lower to a 1.6% annual rise.

The Fed's Kansas City President Jeffrey Schmid warned the energy

shock may not be temporary. Vice Chair for Supervision Michelle

Bowman said a persistent rise in inflation might require tighter

monetary policy.

Money markets expect the Federal Reserve to keep interest

rates steady for the rest of the year, with expectations of a

25-basis-point hike in December.

Among other movers, Gap shares tumbled after the

apparel retailer cut its annual sales forecast, while American

Eagle Outfitters ( AEO ) dropped after keeping its annual

comparable sales forecast unchanged.