S&P 500 gains as Nvidia leads chips stocks higher

Investing.com -- The S&P 500 climbed Tuesday as a surge in semiconductor stocks on AI enthusiasm offset ongoing caution surrounding President Donald Trump’s trade tariffs and the trajectory of the U.S. economy.

At 11:43 AM ET, the Dow Jones Industrial Average gained 130 points, or 0.3%, the S&P 500 index gained 0.6%, while the NASDAQ Composite gained 1%.

Semiconductor stocks surge on AI enthusiasm

NVIDIA Corporation (NASDAQ:NVDA) gained over 3% as investors digest last week’s earnings report. The stock has risen 25% over the last month and is again approaching new highs.

Later this week (June 5), the market will get quarterly results from another AI leader - Broadcom Inc (NASDAQ:AVGO). Analysts are bulled-up into the results. Today, JP Morgan said "we continued to see a strong demand profile for its AI products (custom ASICs and networking solutions), stabilization in the non-AI semi business (e.g., enterprise, server/storage, broadband, wireless) and continued VMware revenue synergy unlock."

Trade tariffs, tax bill progress in focus

Despite gains, markets remained on edge given the uncertainty over the Trump administration’s trade policies, with the president stating over the weekend that he will hike tariffs on steel and aluminum imports to 50% from 25%.

The prospect of higher tariffs has increased concerns of elevated inflation in the coming months.

Trump’s tariff threat also came amid signs of strain between Washington and Beijing, as China denied that it had violated a trade agreement and vowed to safeguard its interests.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

The Trump administration is urging countries to provide their best offers for trade negotiations by Wednesday, according to Reuters.

With a self-imposed 90-day pause to Trump’s sweeping reciprocal tariffs on a host of nations due to expire in July, the White House is racing to secure a bevy of bespoke agreements. Several officials from the Trump administration have suggested that several agreements are close to being secured, although so far the only major deal announced has been with Britain.

However, the European Union has not received a letter from the United States that demands countries to present their best trade negotiation offers by Wednesday, Reuters reported Tuesday.

Tax cut bill working through Congress

Focus was also on the progress of a major tax cut and spending bill through Congress. Trump claimed that the bill is the “single biggest spending cut in history,” amid growing concerns that the bill will widen the fiscal deficit and also ramp up already stretched government debt levels.

The nonpartisan Congressional Budget Office has estimated that the original version of the bill, which was passed by the House of Representatives last month, would add around $3.8 trillion to the federal government’s $36.2 trillion debt pile over the next decade -- a prospect that has caught the attention of many investors.

The upper chamber of Congress returned to Washington earlier this week with Republican lawmakers facing the task of placing Trump’s so-called "One Big Beautiful Bill" on his desk for signing by July 4.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

However, disagreements remain among GOP members over the broad contours of the measure, particularly plans for Medicaid coverage. Some have expressed worries that access to the federal health insurance program for low-income Americans will be limited, although Trump has argued that the proposal would only crack down on waste and fraud.

Job openings beat

Today, the latest Job Openings and Labor Turnover Survey (JOLTS) showed an improvement in the U.S. labor market. Job openings came in at 7391K, beating the consensus of 7110K and above the prior month reading of 7200K.

The data come ahead of the all-important non-farm payrolls report due Friday.

Elsewhere, auto sales data for May trickled out. Ford Motor Company (NYSE:F) reported a 16% rise in U.S. auto sales for May, aided by demand for pickup trucks and crossover SUVs.

The overall economy has shown signs of broad resilience in the face of the tariff turmoil. Still, the Organisation for Economic Co-operation and Development said that it had trimmed its outlook for U.S. growth to 1.6% this year, down from a prior projection of 2.2%.

Dollar General lifts full-year guidance

There were more quarterly earnings to digest Tuesday, with Dollar General (NYSE:DG) reporting first-quarter net sales and earnings that topped estimates, leading the budget retailer to lift its full-year financial guidance despite lingering uncertainty over the impact of sweeping U.S. tariffs.

Signet Jewelers (F:SIG) stock rose after the world’s largest retailer of diamond jewelry reported first quarter fiscal 2026 earnings that beat analyst expectations and raised its full-year guidance.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Nio (NYSE:NIO) stock fell after the Chinese electric vehicle manufacturer reported a wider first-quarter loss than analysts expected.

Elsewhere, Constellation Energy (NASDAQ:CEG) stock soared after Meta Platforms (NASDAQ:META) (NASDAQ:META) entered into a 20-year agreement to purchase nuclear power from the energy company. Other companies in the nuclear sector, including the likes of Oklo (NYSE:OKLO), Nuscale Power (NYSE:SMR) and Vistra Energy (NYSE:VST) also benefited.

Ambar Warrick and Peter Nurse contributed to this article

Should you invest $1,000 in BAC right now?

Don't miss out on the next big opportunity! Stay ahead of the curve with ProPicks AI – 6 model portfolios powered by AI stock picks with a stellar performance in 2024.

Unlock ProPicks to find out