Wall Street extended its record-breaking rally on Monday (Tuesday AEST), with major United States equity indices posting modest gains as investors balanced optimism surrounding artificial intelligence developments against ongoing geopolitical uncertainty in the Middle East.
The Dow Jones Industrial Average rose 46.4 points, or 0.1%, to close at 51,078.9. The S&P 500 gained 19.9 points, or 0.3%, to 7,600.0, while the Nasdaq Composite advanced 114.2 points, or 0.4%, to finish at 27,086.8.
Stocks added to their gains after U.S. President Donald Trump said no Israeli troops would enter Beirut following discussions with Israeli Prime Minister Benjamin Netanyahu, easing some concerns about a broader regional escalation.
Technology stocks remained the primary driver of market gains after NVIDIA surged 6.3% following the unveiling of a new computer chip designed to bring artificial intelligence (AI) capabilities directly to personal computers.
The product marks the culmination of a three-year collaboration between NVIDIA and Microsoft aimed at reshaping personal computing for the AI era.
Microsoft shares climbed 2.3%.
Performance across the semiconductor sector was mixed. Qualcomm fell 8.8%, while Intel declined 4.7%.
Micron Technology continued its strong run, rising 6.6% and pushing its share price above the $1,000 mark for the first time.
Software companies also recovered from earlier weakness linked to concerns that AI could disrupt traditional business models. ServiceNow jumped 9.2%, while IBM gained 7.6%.
Cadence Design Systems rose 10.5% after launching an Nvidia-powered AI agent designed to assist chip developers with semiconductor design processes.
Outside the technology sector, energy stocks were the only other major area of strength within the S&P 500.
Marathon Petroleum gained around 4%, while Exxon Mobil and Chevron advanced 2.8% and 1.9%, respectively, supported by a sharp rebound in crude oil prices.
Brent crude climbed 4.24% to US$94.98 per barrel, and West Texas Intermediate (WTI) crude futures rose 5.5% to settle at US$92.16 per barrel.
The gains followed reports citing Iranian state media that negotiators had suspended communications with the United States and that Tehran intended to shut the Strait of Hormuz in response to Israeli attacks on Lebanon.
Despite the reports, Trump said discussions with Iran were continuing.
Economic data released during the session provided further support for equities, with the Institute of Supply Management's (ISM) manufacturing purchasing managers' index (PMI) expanding in May for a nineteenth consecutive month despite ongoing tariff pressures and geopolitical uncertainty.
Investors are also preparing for a busy week of corporate and economic updates.
Broadcom is scheduled to report earnings on Wednesday U.S. time (Thursday AEST), with investors expected to closely examine results for further evidence of robust demand for AI-related infrastructure.
The report follows strong earnings from Dell Technologies last week, which highlighted continued growth in AI server demand.
Attention is also turning towards Friday's U.S. employment report, which could provide important clues about the health of the economy and the future direction of monetary policy.
The data will be among the final major economic releases before Federal Reserve Chairman Kevin Warsh's first policy meeting later this month.
Investors remain alert to the possibility that rising energy prices and inflationary pressures linked to the Iran conflict could complicate the central bank's outlook and potentially challenge the market's recent advance.
On the bond markets, the yield on the benchmark 10-year Treasury note increased to 4.453%, while the two-year Treasury yield rose to 4.033%.
