Wall St hovers near record highs, tech gains eclipse Iran war anxiety

NEW YORK: 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 US-Iran war could be reached soon, while Nvidia’s latest AI push kept losses in check.

Heavyweight Nvidia rose 3.9 percent after unveiling a new chip that puts AI capabilities directly into laptops and desktop computers following a three-year partnership with Microsoft . Microsoft shares added 2.5 percent and PC makers Dell and HP jumped 9 percent and 7.3 percent, respectively.

The reaction in semiconductor stocks was mixed. Qualcomm tumbled 6.7 percent, while PC chipmakers AMD and Intel fell 2.6 percent and 0.1 percent, respectively. Micron gained 5.7 percent to USD1,022, topping the USD1,000 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 percent after Tasnim news agency reported that Tehran was halting indirect negotiations with the US 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 US 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 US 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 percent chance of a quarter-point rate hike before the end of the year.

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

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