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 sparked a rally in chipmakers.

Advanced Micro Devices' AMD.O 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.O jumped 2.4%, while a broader gauge of U.S. chipmakers .SOX 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 .DJI rose 510.85 points, or 1.04%, to 49,809.10, the S&P 500 .SPX gained 82.14 points, or 1.13%, to 7,341.36 and the Nasdaq Composite .IXIC 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 HUT.O 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 SMCI.O 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.