Wall Street stocks posted modest gains on Monday as investors watched developments in U.S.-Iran peace negotiations and cheered the unveiling of a new computer chip that promises to bring artificial intelligence to personal computing.
Tech shares rose 2.5%, boosting the Nasdaq and the S&P 500 to the latest in a series of record closing highs, while the blue-chip Dow closed nominally higher, its gains limited by weakness in all but two of the 11 major S&P 500 sectors.
U.S. President Donald Trump said talks with Iran continue. Earlier, Iran's news agency announced Tehran was halting indirect negotiations with Washington after a new round of strikes 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 accelerate inflation.
"We don't really know where things stand," said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. "The market seems to think that something's going to get done at some point, but we don't have very good information to go on, like what the Iranians really want and what Trump is willing to settle for."
Stocks added to their gains after Trump said no Israeli troops would go into Beirut, citing a call with Israeli Prime Minister Benjamin Netanyahu.
Nvidia NVDA.O rose 6.3% 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 MSFT.O 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 QCOM.O tumbled 8.8%, while Intel INTC.O fell 4.7%. But Micron MU.O shares breached the $1,000 mark for the first time, rising 6.6%.
The Philadelphia SE Semiconductor Index .SOX advanced 1.1%.
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 .DJI rose 46.42 points, or 0.09%, to 51,078.88, the S&P 500 .SPX gained 19.90 points, or 0.26%, to 7,599.96 and the Nasdaq Composite .IXIC gained 114.19 points, or 0.42%, to 27,086.81.
Of the 11 major sectors in the S&P 500, only technology .SPLRCT and energy .SPNY enjoyed gains, while utilities suffered the largest percentage drop.
Software stocks rebounded from the heavy selling earlier this year on AI disruption fears. ServiceNow NOW.N and IBM IBM.N rose 9.2% and 7.6%, respectively. The software services index .SPLRCIS advanced 4.3%.
"On the software side, companies that hadn't been doing very well, but now are doing well today," Martin added. "Some of that has been attributed to Nvidia comments that software is part of the solution, so the market's coming back to" software stocks.
Cadence Design Systems CDNS.O added 10.5% after launching an Nvidia-powered AI agent for chip design.
Broadcom's AVGO.O earnings, due on Wednesday, will be closely parsed in the wake of solid results from Dell DELL.N last week, which signaled strong AI server demand.
Declining issues outnumbered advancers by a 1.04-to-1 ratio on the NYSE. There were 519 new highs and 144 new lows on the NYSE.
On the Nasdaq, 2,436 stocks rose and 2,403 fell as advancing issues outnumbered decliners by a 1.01-to-1 ratio.
The S&P 500 posted 29 new 52-week highs and 18 new lows while the Nasdaq Composite recorded 122 new highs and 77 new lows.
Volume on U.S. exchanges was 21.80 billion shares, compared with the 19.71 billion average for the full session over the last 20 trading days.
Reuters
