Wall Street's main indices have hovered near record highs as investors weighed Nvidia's latest artificial intelligence push against mounting scepticism that a deal to end the three-month-old US-Iran war could be reached soon.
Nvidia rose 4.0 per cent after unveiling a new chip that puts AI capabilities directly into laptops and desktop computers.
The chip is the result of a three-year partnership with Microsoft to "reinvent the PC" for the AI era, Nvidia CEO Jensen Huang said.
Microsoft shares added 2.5 per cent.
The S&P 500 tech index gained 1.5 per cent.
The reaction in semiconductor stocks was mixed.
Qualcomm tumbled 6.0 per cent while PC chipmakers AMD and Intel fell 3.1 per cent and 4.4 per cent, respectively.
Micron rose 5.7 per cent to $US1,022, topping the $US1,000 mark for the first time.
Its shares have soared nearly 90 per cent in May.
"Nvidia might expand the market but most of its gains will come at the expense of the incumbents," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Memory makers such as Micron stood to benefit because their chips complement the processors that go into new computers, and an AI-driven refresh cycle could lift the premium end of the PC market, he said.
The mood was sombre, with oil prices climbing 5.0 per cent after the Tasnim news agency reported that Iran's negotiating team was stopping talks with the US over attacks on Lebanon.
Nine of the 11 main S&P 500 sectors were in the red, with consumer discretionary leading declines with a 2.0 per cent fall.
In early trading on Monday, the Dow Jones Industrial Average lost 177.00 points, or 0.35 per cent, to 50,855.46, the S&P 500 rose 1.82 points, or 0.02 per cent, to 7,581.88, and the Nasdaq Composite gained 39.52 points, or 0.15 per cent, to 27,012.14.
Software stocks also rebounded from the heavy selling earlier this year on AI disruption fears.
ServiceNow and IBM rose 10.7 per cent and 6.0 per cent respectively.
The software services index advanced 3.0 per cent after erasing all losses from January-end.
Cadence Design Systems added 3.0 per cent after launching an Nvidia-powered AI agent for chip design.
Wall Street's main indices ended May at record highs, buoyed by hopes of an eventual end to the war and blowout first-quarter earnings.
Optimism around AI has helped boost US equities but concerns over the economic effect from the hostilities remain.
Investors will turn to Friday's jobs report ahead of Kevin Warsh's debut policy meeting as chairman of the US Federal Reserve this month, amid fears of rising inflation linked to the Iran war that could upend the stock market rally.
"Passing the baton from one chair to the next isn't always a smooth process. If the Strait of Hormuz doesn't more fully open before the next Fed meeting, it's almost certain that the Fed's policy statement will become more hawkish," Jacobsen said.
Traders have priced in a near 70 per cent chance of a quarter-point rate hike before the end of the year.
Broadcom earnings on Wednesday will also be in focus after a strong results forecast last week from AI-server maker Dell.
Among other company movers, Taylor Morrison Home Corp jumped 22 per cent after Berkshire Hathaway agreed to buy the homebuilder for $US6.8 billion ($A9.5 billion) in cash.
Declining issues outnumbered advancers by a 1.65-to-1 ratio on the NYSE and by a 1.45-to-1 ratio on the Nasdaq.
The S&P 500 posted 17 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 47 new highs and 29 new lows.
