Wall Street futures rise on AI optimism despite Middle East tensions

U.S. stock index futures rose on Monday, 1 June 2026, driven by optimism surrounding artificial intelligence advancements from Nvidia and Microsoft, which overshadowed ongoing tensions between the United States and Iran. Nvidia unveiled a new chip designed for laptops and desktops, developed in partnership with Microsoft, with a release scheduled for this fall. Nvidia shares rose 1.6% in premarket trading, while Microsoft shares gained 2.8%. Competing PC chipmakers AMD and Intel fell 3.4% and 2.9% respectively. Broader market sentiment was tempered by the three-month-old Middle East conflict, with oil prices climbing following recent exchanges of attacks. Investors are awaiting a U.S. jobs report and the first policy meeting of new Federal Reserve chairman Kevin Warsh.

The new chip is the result of a three-year partnership with Microsoft aimed at "reinventing the PC" for the AI era, according to Nvidia CEO Jensen Huang. Dell posted a strong results outlook last week, shifting focus to Broadcom’s results on Wednesday. Broadcom is the second-largest U.S. chipmaker by market value after Nvidia. Cadence Design Systems rose 8.2% after launching an autonomous engineer for chip design, powered by Nvidia. Micron advanced 5.3% to $1,022, topping the $1,000 mark for the first time, with shares having soared nearly 90% in May.

Wall Street’s main indexes closed May at record highs, lifted by hopes of an end to the Middle East war and strong first-quarter earnings. Traders price in a near 70% chance of a one-quarter-point interest rate hike before the end of the year. At 05:18 a.m. ET, the Dow E-minis were up 143 points (0.28%), the S&P 500 E-minis were up 17.5 points (0.23%), and the Nasdaq 100 E-minis were up 86.75 points (0.29%).

Comments from a slew of Fed officials and a beige book report will be in focus this week before the central bank enters its pre-meeting blackout period on Saturday. The broader mood remained somber as uncertainty over the Middle East war lingered, with oil prices climbing after the latest exchange of attacks between the U.S. and Iran raised concerns over efforts to negotiate to end the conflict.

Investors now turn to Friday's jobs report ahead of Kevin Warsh's debut policy meeting as the chairman of the U.S. Federal Reserve this month, against a backdrop of rising inflation fears linked to the Iran war. The market's firm start to June highlights the tension between robust corporate earnings in the technology sector and the persistent macroeconomic risks posed by geopolitical instability.

The performance of major indices reflected this divergence, with the Nasdaq 100 leading gains due to its heavy weighting in AI-related equities. Meanwhile, traditional energy and industrial sectors faced headwinds from the rising cost of oil, a direct consequence of the escalating tensions in the Middle East. This dynamic underscores the complex interplay between technological innovation and global security in current market conditions.

As the week progresses, attention will remain fixed on the Federal Reserve's upcoming policy decisions and the broader economic data releases. The combination of strong tech earnings and geopolitical uncertainty creates a volatile environment for investors, who must navigate the potential for rate hikes against the backdrop of a war that could disrupt global supply chains and energy markets.