All three major U.S. stock indexes closed at record highs on the first trading day of June, as technology shares rallied amid expectations that hostilities between the United States and Iran would not escalate to the levels seen in the early stages of the war.
On Monday, the first trading day of June, the Dow Jones Industrial Average closed up 0.09% at 51,078.88. The Standard & Poor's 500 rose 0.26% to 7,599.96, while the Nasdaq advanced 0.42% to 27,086.81. However, the broader rally was limited, with nine of the 11 sectors in the S&P 500 declining.
Nvidia surged 6.3% after recently unveiling its semiconductors for personal computers. Dell and HP, expected to benefit from the move, jumped 10% and 8%, respectively. Intel, which has long dominated the PC chip market, fell 4.7%, while Qualcomm slid 8.8%. Micron rose 6.6%, with its stock surpassing $1,000 for the first time. The Philadelphia Semiconductor Index gained 1.1%.
Energy stocks climbed as oil prices spiked. Exxon Mobil and Chevron rose 2.8% and 1.9%, respectively. After Iran announced it was suspending ceasefire negotiations with the United States, citing Israel's attack on Lebanon, Brent crude futures for August delivery closed up 4.2% at $94.98 per barrel. U.S. West Texas Intermediate (WTI) futures for July delivery ended 5.5% higher at $92.16. WTI had risen as much as 7.8% during the session but pared gains after President Trump claimed that Israel and Hezbollah had agreed to halt hostilities and that negotiations with Iran were progressing at a rapid pace.
"The market clearly does not expect hostilities to re-accelerate to the levels seen in the first two to three weeks of the war," said Tim Holland, Chief Investment Officer at U.S. investment firm Orion. "We are still closer to the exit of this war than the entrance." Holland added, "Energy prices will likely remain below the levels seen about four to six weeks ago. To breach that threshold, the conflict would need to escalate to a level more severe than at its peak."
