ORLANDO, Florida, May 27 (Reuters) - World stocks eked

out new highs while major markets such as the S&P 500, U.S.

dollar and Treasuries were largely steady on Wednesday as

investors digested conflicting signals on a potential U.S.-Iran

peace deal and awaited U.S. inflation figures on Thursday.

In my column today, I look at comparisons between the current AI

capex boom - the largest ever - and the dotcom mania of the late

1990s. Despite growing risks, there are reasons to believe a

market crash is neither imminent nor inevitable.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. US and Iran remain divided on Hormuz deal as White

House rejects Tehran TV report

2. Investors expect US dollar to break higher as Fed

battles inflation

3. US bonds about to bite stocks: Mike Dolan

4. Europe's push to break Big Tech's grip tempered by

internal debate

5. FOCUS-Prediction markets look to institutional

investors for next phase of growth

Today's Key Market Moves

* STOCKS: South Korea up 3% to new high, China -1%.

Europe flat, UK up 0.1%. Wall Street mixed: Dow, Russell 2000

post new highs; S&P 500, Nasdaq basically flat.

* SECTORS/SHARES: Five sectors on the S&P 500 rise, six

fall. Consumer discretionary +1.9%, energy -1.5%. Zscaler -31%,

Qualcomm -9%, JPMorgan Chase -2.4%. United Airlines +6%, Procter

& Gamble +3%.

* FX: Dollar index flat. NZ dollar +1%, biggest G10 FX

mover. Yen hits 4-week low, back in possible intervention zone.

* BONDS: U.S. yields 1-2 bps lower. 5-year auction

better than previous, but registers yet another tail.

* COMMODITIES/METALS: Oil -4%, gold slips to 2-month

low.

Today's Talking Points

* Pipes of peace

We've been here before. President Donald Trump suggests a

U.S.-Iran peace deal is close, investors get all giddy, stocks

rally and oil slides. Iran denies it, the market positivity

evaporates, and oil spikes (the AI mania keeps stocks elevated).

We had a role reversal on Wednesday - Iranian state TV cited

an unofficial memorandum of understanding outlining the

framework for a deal that would see the Strait of Hormuz reopen

within a month. The U.S. called it a "complete fabrication." But

markets are behaving as if a deal is in the offing - oil is back

below $100, and stocks are at all-time highs.

* Pipes of PCE

U.S. PCE inflation for April is published on Thursday, the

first major inflation report in the Kevin Warsh era at the U.S.

Federal Reserve. Economists expect headline annual PCE to rise

to 3.8%, matching headline CPI, and the core annual rate to

increase to 3.3%, notably higher than the 2.8% core CPI rate.

Hopes of a resolution to the U.S.-Iran war have lowered oil

prices, bond yields and Fed expectations, but traders are still

putting a 50-50 probability on a rate hike by year's end. PCE

releases are always important. This one, for Warsh and the Fed,

especially so.

* Hawk wind

The Reserve Bank of New Zealand kept rates on hold on Wednesday,

but the split decision is a sign hikes are imminent. This

follows rate increases in Australia and Norway, strong hawkish

guidance from European Central Bank officials, and a shift in

tone at the Fed.

In emerging economies, Sri Lanka stunned markets with a 100 bps

hike this week, and Brazil's easing path was clouded by sticky

inflation figures. Central bankers everywhere are hoping for an

end to the U.S.-Iran war. If that isn't forthcoming, they face

difficult choices.

What could move markets tomorrow?

* Developments in the Middle East

* South Korea interest rate decision

* Bank of Japan Deputy Governor Ryozo Himino speaks

* European Central Bank officials scheduled to speak include

President Christine Lagarde, board member Isabel Schnabel and

chief economist Philip Lane

* Euro zone consumer, business confidence (May)

* Canada current account (Q1)

* Bank of Canada Governor Tiff Macklem speaks

* U.S. weekly jobless claims

* U.S. PCE inflation (April)

* U.S. durable goods (April)

* U.S. GDP (Q1, second estimate)

* U.S. Treasury sells $44 billion of 7-year notes at auction

* U.S. Federal Reserve officials scheduled to speak include

Vice Chair Philip Jefferson and Richmond Fed President Thomas

Barkin

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