Stocks hold near record highs as AI optimism trumps Iran tensions

Global stock markets held near record levels on June 1, as investor confidence in AI-driven corporate growth overshadowed rising tensions between the U.S. and Iran. The S&P 500 remained near all-time highs, supported by gains in energy and technology sectors, despite losses in consumer discretionary, materials, and utilities. The Dow Jones Industrial Average fell 0.43%, the S&P 500 dipped 0.05%, and the Nasdaq Composite rose slightly by 0.11%, while the pan-European STOXX 600 declined 1.1%. The MSCI All-World index also dropped 0.20% after hitting a fresh record earlier in the day. The U.S. reported striking Iranian military sites over the weekend, prompting Iran’s Revolutionary Guards to retaliate by targeting a U.S. base. Iran’s news agency Tasnim announced the halt of indirect negotiations with the U.S. following Israel’s escalation in Lebanon against Hezbollah, a group backed by Tehran. These developments raised concerns over a potential disruption to diplomatic efforts to end the three-month conflict. Nvidia’s announcement of a new AI chip designed for laptops and desktops further fueled tech sector optimism, intensifying competition among semiconductor manufacturers. The chip’s release highlights growing investor focus on AI advancements, which have driven strong corporate earnings revisions and sustained market buying despite geopolitical risks. Market strategist Mark Hackett of Nationwide in Philadelphia noted that investors are prioritizing AI-driven growth over geopolitical risks, fearing missed opportunities if they exit the market prematurely. Meanwhile, Brent crude futures surged nearly 7% to $97.43 per barrel, reflecting heightened oil price volatility amid the escalating tensions.