Wall St Near Record Levels As AI Optimism Empers War Concerns; Nvidia, Microsoft Up

Wall Street’s main indexes stayed near record levels on Monday after oil prices spiked on mounting skepticism that a ‌deal to end the three-month-old U.S.-Iran war could be reached soon, while Nvidia’s latest AI push kept losses in check.

Heavyweight Nvidia (NVDA.O), rose 3.9% after unveiling a new chip that puts AI capabilities directly into laptops and desktop computers following a three-year partnership with Microsoft (MSFT.O). Microsoft shares added 2.5% and PC makers Dell (DELL.N), and HP (HPQ.N), ​jumped 9% and 7.3%, respectively.

The reaction in semiconductor stocks was mixed. Qualcomm (QCOM.O), tumbled 6.7%, while PC chipmakers AMD (AMD.O), and Intel fell 2.6% and 0.1%, ​respectively. Micron (MU.O), gained 5.7% to $1,022, topping the $1,000 mark for the first time and extending its scorching rally.

“There’s real ⁠money coming into these companies, so it’s an interesting place to be. But that all said, all it takes is one negative ​headline to kind of push us back in the wrong direction,” said Ryan Lee, Direxion’s senior vice president of product and strategy.

The broader ​mood was somber, with oil prices climbing 5% after Tasnim news agency reported that Tehran was halting indirect negotiations with the U.S. over attacks on Lebanon.

“The reality of this conflict is the longer it goes on, the higher oil prices will likely get driven up and… you will feel those ripple effects across every corner of ​the market,” Lee said.

Wall Street’s main indexes ended May at record highs, buoyed by hopes of an eventual end to the war and blowout first-quarter earnings. Optimism around AI ​has also helped boost U.S. equities, but concerns over the economic impact from the hostilities persist.

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.

Traders have priced in a near 70% chance of a quarter-point rate hike before the end of the year.

At 11:22 a.m. ET, the Dow Jones Industrial Average (.DJI), fell 136.66 points, or 0.27%, to 50,897.15, the S&P 500 (.SPX), was unchanged, or 0.00%, to 7,580.05, and ​the Nasdaq Composite (.IXIC), rose 47.54 points, or ​0.18%, to 27,020.16.

Nine of the ⁠11 main S&P 500 sectors were in the red, with only tech (.SPLRCT), and energy (.SPNY), in positive territory.

Software stocks rebounded from the heavy selling earlier this year on AI disruption fears. ServiceNow (NOW.N), and IBM (IBM.N), rose ​10.7% and 6%, respectively. The software services index (.SPLRCIS), advanced 3.9% after erasing all losses from January-end.

Cadence ​Design Systems (CDNS.O), added ⁠6.2% after launching an Nvidia-powered AI agent for chip design.

Broadcom’s (AVGO.O), earnings on Wednesday will also be in focus following a strong results forecast last week from Dell signaling strong AI server demand.

Among other company movers, Taylor Morrison Home Corp (TMHC.N), jumped 22% after Berkshire Hathaway (BRKa.N), agreed to buy the homebuilder for $6.8 ⁠billion in ​cash.

Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE and by a ​1.35-to-1 ratio on the Nasdaq.

The S&P 500 posted 22 new 52-week highs and 16 new lows, while the Nasdaq Composite recorded 79 new highs and 61 new lows.

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