Dow Drops 132 Points as Oil Surges; Nvidia Rises on AI PC Chip

The Dow Jones Industrial Average fell 132 points on Monday as oil prices rose amid renewed tensions between the United States and Iran. The S&P 500 slipped 0.2% and the Nasdaq Composite fell 0.1% at the open. Nvidia shares rose about 3% after the company introduced a processor designed to run AI workloads on personal computers.

All three major U.S. indexes entered the session after closing May at record highs. The Nasdaq gained more than 8% for the month, the S&P 500 rose about 5%, and the Dow added nearly 3% in May.

Nvidia said the chip was developed in a three-year partnership with Microsoft to bring AI capabilities directly to PCs. Nvidia Chief Executive Jensen Huang described the processor as an effort to “reinvent the PC” for the AI era. Microsoft shares gained roughly 3.3% following the announcement.

Hardware makers reacted unevenly. Dell Technologies rose more than 8% after introducing an updated XPS 13 laptop. HP climbed about 4%. Memory chipmaker Micron advanced 5.6%, pushing its share price above $1,000 after a near 90% rally in May. Semiconductor peers moved lower: Qualcomm fell 5.8%, AMD declined about 4% and Intel dropped close to 3%.

Software and design stocks also moved higher. ServiceNow and IBM each posted gains near 9.6% and 6.3% respectively. Cadence Design Systems rose 2.9% after launching an Nvidia-powered AI agent for chip design.

Energy markets reacted to reports of escalating regional hostilities. West Texas Intermediate crude futures rose about 5% to roughly $91 a barrel and Brent crude climbed about 4% to near $95. Iranian state media reported that negotiators had suspended communications with the United States over Israeli strikes in Lebanon. Over the weekend, the U.S. and Iran exchanged strikes, and U.S. Central Command reported that American forces intercepted two Iranian ballistic missiles overnight that were said to be targeting U.S. personnel in Kuwait. Israel ordered troops to move deeper into Lebanon.

Market attention also focused on economic and policy events. Traders assign about a 70% probability to a quarter-point interest-rate increase before year-end. The U.S. nonfarm payrolls report is due Friday, ahead of Federal Reserve Chair Kevin Warsh’s first policy meeting later this month. Investors are also watching Federal Reserve officials’ public remarks and the Fed’s Beige Book.

Corporate moves affected individual stocks. Taylor Morrison shares jumped more than 22% after Berkshire Hathaway agreed to acquire the homebuilder in a $6.8 billion cash deal.

Investors traded with caution as company announcements and upcoming economic data factored into market activity.