AI chip news lifts Nvidia, Microsoft as indexes open June at records

Major U.S. stock indexes opened June trading near record levels as enthusiasm for artificial intelligence hardware drove gains in Nvidia and Microsoft shares. Dow futures rose 227 points, or 0.4 percent, while S&P 500 and Nasdaq-100 futures each advanced 0.2 percent in premarket action. Nvidia shares climbed more than 2 percent after the company announced a new processor developed with Microsoft for personal computers.

The moves extended a May rally in which the Nasdaq Composite gained more than 8 percent, the S&P 500 rose about 5 percent and the Dow added nearly 3 percent, with all three benchmarks closing at fresh highs on May 30 after the United States and Iran agreed to a 60-day memorandum extending a ceasefire. West Texas Intermediate crude futures increased 3 percent to around $90 a barrel and Brent crude rose 3 percent to around $93 a barrel. Analysts at Vital Knowledge noted that markets appeared to price in a sustained reduction in hostilities and warned of a possible "sell the news" reaction once any formal announcement occurs.

Nvidia chief executive Jensen Huang described the new N1X processor as a "reinvention of the computer" comparable to the shift from feature phones to smartphones and said artificial intelligence would run across the devices. Dell Technologies and HP shares rose more than 1 percent and 4 percent respectively in response, while Arm gained 14.5 percent. Intel shares fell more than 6 percent. ServiceNow, IBM and Hewlett Packard also posted double-digit premarket gains. Investors will next focus on the June 6 nonfarm payrolls report for signals on labor-market strength and Federal Reserve policy.