By Stephen Culp and Medha Singh
NEW YORK, June 1 (Reuters) – Wall Street stocks began the new week and month with modest gains amid rapid developments in U.S.-Iran peace negotiations and the unveiling of a new computer chip that promises to bring artificial intelligence to personal computing.
Tech shares, up 2.6%, put the Nasdaq and the S&P 500 on course for the latest in a series of record closing highs, while the blue-chip Dow remained essentially unchanged.
U.S. President Donald Trump said talks with Iran continue, although Iran’s news agency announced Tehran is halting indirect negotiations with Washington following a new round of strikes, which threatened to derail diplomatic efforts to end the war, now in its fourth month.
The intensification of hostilities sent crude prices jumping, along with worries over the extent to which a protracted war could result in heightened, intransitory inflation.
“The market has been toggling back and forth within the last week or so, mostly having to do with oil prices,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. “The run-up that we saw in the equity markets this past week was a direct correlation to the decline in oil prices. As the Iranian conflict ebbs and flows, the market is responding accordingly.”
Stocks added to their gains after Trump said no Israeli troops would go into Beirut after a call with Israeli Prime Minister Benjamin Netanyahu.
Nvidia rose 5.8% after the company unveiled a new chip that puts AI capabilities directly into personal computers.
The chip is the result of a three-year partnership with Microsoft to “reinvent the PC” for the AI era, Nvidia CEO Jensen Huang said. Microsoft shares added 2.3%.
The reaction among semiconductor stocks was mixed. Qualcomm tumbled 8.2%, while Intel fell 4.4%. Micron shares breached the $1,000 mark for the first time, rising 7.0%.
The Philadelphia SE Semiconductor Index advanced 1.5%.
In economic news, U.S. factory activity expanded in May for the fifth consecutive month as goods-makers navigate tariff and geopolitical crosswinds.
Investors will turn to Friday’s jobs report ahead of Kevin Warsh’s debut policy meeting as chairman of the U.S. Federal Reserve this month, amid fears of rising inflation linked to the Iran war that could upend the stock market rally.
The Dow Jones Industrial Average rose 4.68 points, or 0.01%, to 51,037.14, the S&P 500 gained 32.39 points, or 0.43%, to 7,612.45 and the Nasdaq Composite gained 187.27 points, or 0.69%, to 27,159.89.
Of the 11 major sectors in the S&P 500, only technology and energy enjoyed gains, while utilities suffered the biggest percentage drop.
Software stocks rebounded from the heavy selling earlier this year on AI disruption fears. ServiceNow and IBM rose 9.0% and 7.3%, respectively. The software services index advanced 4.3%.
Cadence Design Systems added 8.8% after launching an Nvidia-powered AI agent for chip design.
Broadcom’s earnings, due on Wednesday, will be closely parsed in the wake of solid results from Dell last week, which signaled strong AI server demand.
Declining issues outnumbered advancers by a 1.05-to-1 ratio on the New York Stock Exchange. There were 426 new highs and 121 new lows on the NYSE.
On the Nasdaq, 2,426 stocks rose and 2,364 fell as advancing issues outnumbered decliners by a 1.03-to-1 ratio.
The S&P 500 posted 27 new 52-week highs and 17 new lows while the Nasdaq Composite recorded 102 new highs and 67 new lows.
(Reporting by Stephen Culp in New York; Additional reporting by Medha Singh and Twesha Dikshit in Bengaluru; Editing by Matthew Lewis)
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