US STOCKS-Wall St rises, Dow hits record high with U.S.-Iran talks in focus

* UBS Global Wealth lifts S&P 500 2026 target to 7,900 from 7,500 pts

* Est?e Lauder jumps after ending merger talks with Puig

* Kevin Warsh to be sworn in as Fed chair later in the day

* Indexes up: Dow 0.6%, S&P 500 0.7%, Nasdaq 0.7% (Updates to market open)

By Shashwat Chauhan and Medha Singh

May 22 (Reuters) - Wall Street's main indexes rose on Friday, with the blue-chip Dow hitting a record high for the first time since the Iran war began, as investors tracked progress in talks to end the nearly three-month-old conflict ahead of the long weekend.

Iran's foreign minister met the interior minister of Pakistan to discuss proposals to end the conflict, media reports said, with Tehran and Washington still at odds over Iran's uranium stockpile and control over the Strait of Hormuz.

Global stocks have whipsawed since the conflict began in late February, but hopes of an eventual resolution to the war, optimism in the AI trade and resilient earnings growth have propelled U.S. stocks to record highs this month.

"While key differences between the U.S. and Iran still need to be resolved to end the war, the continuation of peace talks remains a supportive factor for investors," said Peter Cardillo, chief market economist at Spartan Capital Securities.

UBS Global Wealth Management raised its 2026 year-end target for the S&P 500 to 7,900 from 7,500, citing resilient consumer spending and seemingly insatiable demand for data center infrastructure.

The market recovery, however, has faced some hurdles as investors fret about the inflationary impact of surging oil prices, pushing government bond yields higher around the world and hitting risk appetite this week.

Treasury yields slipped on Friday with the 10-year U.S. note yield easing to a one-week low of 4.54%.

Later in the day, Kevin Warsh will be sworn in as Federal Reserve leader at the White House, taking over the reins from Jerome Powell, a pivotal moment for monetary policy and the American economy.

Volatility eased ahead of the three-day market holiday, with U.S. markets shut on Monday for Memorial Day. The CBOE volatility index hovered near a two-week low at 16.64.

At 09:42 a.m. ET, the Dow Jones Industrial Average rose 315.07 points, or 0.63%, to 50,600.73, the S&P 500 gained 48.51 points, or 0.65%, to 7,494.23 and the Nasdaq Composite gained 175.63 points, or 0.67%, to 26,468.72.

Ten out of the 11 major S&P 500 sector indexes were higher, led by healthcare.

The price-weighted Dow notched its first intraday record high since February 10, becoming the last of the three main U.S. stock indexes to hit the milestone. A near 3% gain in IBM (IBM) and a 3.4% rise in Salesforce (CRM) were among the biggest boosts to the index.

The S&P 500 is on track for an eighth consecutive weekly gain, which would mark its best winning streak since December 2023.

Most megacap and growth stocks traded higher. Nvidia (NVDA) inched up 0.5%, a day after the stock fell 1.7% despite providing a robust quarterly forecast.

Semiconductor stocks, a key driver of recent Wall Street gains, also rose. The Philadelphia chip index rose 1.5%.

Est?e Lauder surged 12% after the cosmetics maker and Spanish perfumery Puig ended talks for a potential merger.

Workday jumped 9.4% after the human resources software provider exceeded expectations for first-quarter revenue and profit.

Take-Two Interactive added 2.5% after the video game company reiterated the November 19 launch date for the highly awaited "Grand Theft Auto VI" game.

A final reading of the May U.S. consumer sentiment is also due later in the day.

Advancing issues outnumbered decliners by a 1.89-to-1 ratio on the NYSE and by a 2.27-to-1 ratio on the Nasdaq.

The S&P 500 posted 20 new 52-week highs and no new lows while the Nasdaq Composite recorded 74 new highs and 38 new lows.

(Reporting by Shashwat Chauhan and Medha Singh in Bengaluru; Editing by Pooja Desai and Devika Syamnath)