Stock Market Rebounds on Technology Sector Strength and Geopolitical Developments in the Middle East

Wall Street Stocks Rise Amid Ongoing US-Iran Peace Negotiations and AI Breakthroughs

New York, June 1 - The US stock market began the new week and month with modest gains, driven by rapid developments in US-Iran peace negotiations and the unveiling of a new computer chip that promises to bring artificial intelligence to personal computing.

The Nasdaq and the S&P 500 were on course for the latest in a series of record closing highs, while the blue-chip Dow remained essentially unchanged. The intensification of hostilities between the US and Iran sent crude prices jumping, along with worries over the extent to which a protracted war could result in heightened, intransitory inflation.

The market's reaction to the ongoing conflict was evident in the stock prices of energy companies, with oil prices surging. However, the overall market trend was driven by tech shares, which rose 2.6% and put the Nasdaq and the S&P 500 on course for record closing highs.

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Nvidia's shares 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. Microsoft shares added 2.3%. The reaction among semiconductor stocks was mixed, with Qualcomm tumbling 8.2% and Intel falling 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.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

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.