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.”
Matthew Keator, managing partner in the Keator Group
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.
Background
The ongoing conflict between the U.S. and Iran has been a significant factor affecting global markets, particularly in terms of oil prices and inflation expectations. The unveiling of Nvidia's new AI chip marks a pivotal moment in the tech industry, potentially transforming personal computing.
Investors will be closely watching the upcoming jobs report and the Federal Reserve's policy meeting for further market direction.
