Dow falls 130 points as oil jumps, Nvidia gains on new AI PC chip

• Nvidia and Microsoft gained 1.7% and 3.3% respectively on their AI PC chip partnership announcement, lifting Dell (+8%) and HP (+4%), while competitors Qualcomm (-5.8%), AMD (-4%), and Intel (-3%) declined
• WTI crude climbed ~5% to $91/barrel and Brent rose ~4% to $95 after Iran suspended US talks following Israeli attacks in Lebanon and exchange of strikes over the weekend
• Markets assign roughly 70% probability to a quarter-point Fed rate increase before year-end, with nonfarm payrolls data due Friday providing key labor market insight

Market Summary: June 1, 2026

Market Performance:

U.S. markets opened lower on Monday despite reaching record highs in May. The Dow Jones fell 132 points (-0.26%), while the S&P 500 dropped 0.2% and the Nasdaq declined 0.1%. In May, the Nasdaq surged 8%, the S&P 500 rose 5%, and the Dow gained 3%.

Nvidia AI Chip Catalyst:

Nvidia unveiled a new AI processor for personal computers, developed through a three-year partnership with Microsoft to "reinvent the PC" for the AI era. Nvidia shares jumped 6.7%, while Microsoft gained 3.3%. The announcement created winners and losers across the semiconductor sector: Dell surged 8%, HP rose 4%, and Micron advanced 5.6%. Conversely, competitors suffered—Qualcomm fell 5.8%, AMD dropped 4%, and Intel declined 3%.

Software Sector Recovery:

AI-focused software stocks rebounded strongly, with ServiceNow up 9.6%, IBM gaining 6.3%, and Cadence Design Systems rising 2.9% after launching an Nvidia-powered AI chip design tool.

Oil Surge on Geopolitical Tensions:

Crude prices jumped sharply on Middle East escalation. WTI crude climbed approximately 5% to $91/barrel, while Brent rose 4% to $95. Iranian state media reported suspended U.S. negotiations following Israeli attacks in Lebanon. Weekend exchanges included Iranian ballistic missiles targeting U.S. forces in Kuwait, threatening a previously announced 60-day ceasefire memorandum.

Economic Outlook:

Markets await Friday's nonfarm payrolls report for labor market insights ahead of Fed Chairman Kevin Warsh's first policy meeting. Traders assign a 70% probability to a quarter-point rate increase by year-end.