AI chip rally lifts US stocks; jobs and Iran risks loom

AI chip strength pushed U.S. stock indexes near record levels on Tuesday. The S&P 500 rose about 0.14% to roughly 7,610, the Dow Jones Industrial Average gained about 0.21% to near 51,187 and the Nasdaq Composite added roughly 0.10% to around 27,113. The market advance was narrow, with gains in semiconductors and cyclical stocks offset by heavy selling in large software and communication names.

Chipmakers led the session. Hewlett Packard Enterprise reported second-quarter revenue of $10.68 billion versus $9.79 billion expected and raised its guidance, sending its shares higher by nearly 16%. Broadcom climbed about 5% and Qualcomm rose roughly 5.6%. Marvell Technology surged roughly 27% after NVIDIA CEO Jensen Huang called it the ‘next trillion dollar company.’ NVIDIA previously invested $2 billion in Marvell as part of a partnership on AI chips and networking.

Labor-market data showed 7.62 million job openings in April, above consensus estimates near 6.9 million and the highest level since May 2024. The reading exceeded economists’ forecasts and led market pricing to show lower odds of near-term Federal Reserve rate cuts.

Geopolitical developments pushed prices in the other direction. Iran announced it was ending talks with the United States and threatened to block the Strait of Hormuz, a major oil shipping route. The energy sector rose about 1.38% and crude prices moved higher. Utilities gained about 1.58% on defensive buying and on investor interest in rising power demand tied to AI data centers. Basic materials advanced about 1.33% and the broader technology sector added roughly 0.96%. Healthcare fell 1.59% and communication services dropped about 1.28%.

Large-cap tech participation was mixed. Alphabet fell roughly 2.5% after announcing plans to raise about $80 billion to fund its AI expansion. Microsoft and other mega-cap software names experienced heavy selling, which constrained the overall market advance. New 52-week highs continued to outnumber new lows by about two to one.

Technically, the S&P 500 cleared resistance near 7,604. Market commentators identified potential upside targets near 7,677 and 7,890 if that level holds, with support seen in the 7,505–7,546 range. Traders said attention will turn to additional chip and AI-hardware earnings in the coming days, and to key economic and policy events in mid-June, including May CPI on June 10, May PPI on June 11 and the Federal Open Market Committee meeting on June 16–17.