Nvidia's New Chip Boosts Tech Early as War Flares

Published as of: June 1, 2026, 9:13 a.m. ET

(Monday market open) New clashes in the Middle East and rising oil prices didn't initially thwart Wall Street's rally. Instead, major indexes began June on a higher note, focused on Nvidia's (NVDA) 2% jump after it announced a new chip aimed at the PC market that, according to CEO Jensen Huang, would bring these decades-old machines into the age of AI.

Jobs data dominate the coming days, building up to Friday's May nonfarm payrolls. As numbers arrive starting tomorrow with job openings, Federal Reserve policy comes into focus. "The labor market is likely taking a backseat to inflation in terms of Fed policymaking decisions, but we'll be looking for signs of strength or weakness," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "A strengthening market could raise the odds of a rate hike if the Fed thinks the economy can handle tighter monetary policy."

On Friday, nine of 11 S&P sectors fell even while the S&P 500 Index posted new highs and rose for the ninth straight week, reinforcing the surging tech sector's prominence. Last week's rally hinged on booming earnings from closely watched tech firms—along with falling crude and yields. Several critical tech earnings loom, notably Broadcom (AVGO) late Wednesday and Palo Alto Networks (PANW) tomorrow. "We're entering June, which historically is not a bullish month for stocks," said Nathan Peterson, director of derivatives research and strategy at SCFR. "But the bullish momentum and animal spirits in stocks have been so strong over the past several weeks that seasonality may not matter this time around."

1. Can manufacturing keep improving? Today's May ISM Manufacturing PMI^®, due at 10 a.m. ET, is expected to come in at 52.6%, well above the 50% level needed for expansion. "These manufacturing readings have actually been improving," said Liz Ann Sonders, chief investment strategist at SCFR, in Friday's Schwab On Investing podcast. "In fact, four months ago, we saw a move out of what would be considered recession territory for manufacturing back into expansion territory." One driver for manufacturing growth is supplier deliveries, a sub-factor to check in today's report. Usually, an improvement in supplier deliveries is seen as positive, meaning demand is outstripping supply. The category's recent performance, however, might reflect supply constraints stemming from the closure of the Strait of Hormuz.
    
2. Start your engines for jobs week: Nonfarm payrolls are expected to rise by around 96,000 jobs in May, down from 115,000 in April. That number almost doubled analysts' average estimate, while unemployment remained at 4.3%. The unemployment rate has been between 4% and 4.5% for 22 months in a row. Consensus for May jobs growth and unemployment of 4.3% could change over the course of the week depending on reports like tomorrow's April Job Openings and Labor Turnover Survey, or JOLTS, and Wednesday's ADP employment data. Layoffs data Thursday could hint whether recent job cut announcements from large tech firms started to build last month. Recent weak consumer sentiment didn't correspond with any sign of rising jobless claims, but does suggest, among other things, that people may feel less certain about their job status and prospects.
    
3. Earnings growth could also hinge on supplies: Dell's (DELL) massive earnings beat last week helped cap a reporting season that featured S&P 500 firms reporting almost 29% annual earnings per share growth. That's the highest in more than four years and more than double what analysts had expected back on March 31. Profit growth momentum could last, judging from Wall Street's estimates for 20% year-over-year earnings this quarter and in the second half of 2026, per FactSet. If most investors were asked the main potential impediment, they'd likely point to chances of slowing demand—whether it's from inflation-weary consumers or from technology firms with thin pocketbooks after all their AI spending. That's one possible stumbling block. The other is on the supply side, especially if the war continues. Several prominent CEOs in various industries have mentioned difficulty obtaining raw materials, a factor that could slow earnings growth amid supply shortages. Companies can't sell and make profit from goods they're unable to manufacture.

• Nvidia climbed 2.5% ahead of the open. Huang, in a speech earlier today, said Anthropic and OpenAI are among users of Nvidia's new chip for microprocessors, Bloomberg reported. Nvidia is partnering with Microsoft (MSFT) on what Huang called the largest "PC reinvention in 40 years." Shares of Microsoft soared 4.6% on the news. Advanced Micro Devices (AMD), a competitor of Nvidia's, fell 3.4%.
   
• Intel (INTC), which has long dominated the PC chip market, headed the other direction on Nvidia's announcement, falling 6% on worries the new chip could pose competition. Qualcomm (QCOM), another competitor of Nvidia's, fell 8%.
   
• Arm Holdings (ARM) climbed 12% early today, bolstered by Nvidia's announcement. The new RTX Spark PC chip from Nvidia uses Arm technology, MarketWatch noted. Dell (DELL) and HP Inc. (HPQ), which Nvidia said it's working with on the new laptops with its technology, both rose.
   
• IBM (IBM) surged 12% in early action, lifted by Barclays initiating coverage of the stock with an overweight rating and a $350 price target, Barron's reported. Customer loyalty in the company's infrastructure software business could help protect IBM from AI, the analyst note said.
   
• Taylor Morrison Home (TMHC) built up 22% gains early today on news that Berkshire Hathaway (BRK.B) was buying the home building company in a cash deal valued at $8.5 billion. According to Barron's, this appears to be an attempt by Berkshire to buy a home building stock at a discount with the housing market under pressure from high mortgage rates.
   
• Software shares, which rocketed late last week, continued their ascent this morning. ServiceNow (NOW) led the pack, up 9%, followed by 6.6% gains for Adobe (ADBE) and 5.8% for Salesforce (CRM).
   
• U.S. crude prices popped 3.5% early Monday. The U.S. struck military targets in southern Iran over the weekend, news reports said, and Kuwait accused Iran of attacking it. Israel expanded attacks in Lebanon. Crude fell nearly 17% in May, and stocks remain closely correlated. Oil's rally today could pose a barrier if it continues, though the market seems to be adapting to higher crude.
   
• The 10-year Treasury note yield edged up early today after dropping about 10 basis points last week, and the 2-year note yield hit its highest point since February 2025. "Even if we get a true de-escalation with the Strait, long-term Treasury yields are unlikely to fall much further given ongoing inflationary pressures, fiscal concerns, and upward pressure on the term premium," Martin said.
   
• Market breadth remains unimpressive despite the recent record highs, as just 52% of S&P 500 stocks traded above their 50-day moving average at Friday's close. A rally that's smaller in breadth tends to be more dependent on strength from a handful of stocks and often more volatile. Volume has been light for the most part, too, raising questions about conviction behind the rally.
   
• Technically, recent rallies carried the major indexes into overbought territory as measured by the Relative Strength Index (RSI). "I recognize that we are near-term overbought, and therefore the potential for a profit taking pullback is present," my colleague Peterson said. The tech-heavy Nasdaq-100^® (NDX) rose more than 10% in May while the S&P 500 Index rose 5%.

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The S&P 500 Equal Weight Index (SPXEW—candlesticks), which weighs all components equally rather than by market capitalization, lags well behind the S&P 500 Index (SPX—purple line) over the last three months and even more behind the tech-heavy Nasdaq-100® (NDX—blue line). This is a reminder to investors that the S&P 500, with mega caps dominating, increasingly reflects what's happening in tech, not the broader market. A healthy rally would likely see the SPXEW gain ground versus its more well-known brethren over coming weeks, which would be a sign of more investment across all sectors.