(Updates to midafternoon trading, adds analyst comment)

* Indexes up: Dow 0.01%, S&P 500 0.43%, Nasdaq 0.69%

* Nvidia ( NVDA ) gains on unveiling new chip to bring AI to

laptops

* Micron shares top $1,000 for the first time

* Jobs report, Broadcom ( AVGO ) results on deck this week

By Stephen Culp and Medha Singh

NEW YORK, June 1 (Reuters) - Wall Street stocks began

the new week and month with modest gains amid rapid developments

in U.S.-Iran peace negotiations and the unveiling of a new

computer chip that promises to bring artificial intelligence to

personal computing.

Tech shares, up 2.6%, put the Nasdaq and the S&P 500 on

course for the latest in a series of record closing highs, while

the blue-chip Dow remained essentially unchanged.

U.S. President Donald Trump said talks with Iran continue,

although Iran's news agency announced Tehran is halting indirect

negotiations with Washington following a new round of strikes,

which threatened to derail diplomatic efforts to end the war,

now in its fourth month.

The intensification of hostilities sent crude prices

jumping, along with worries over the extent to which a

protracted war could result in heightened, intransitory

inflation.

"The market has been toggling back and forth within the last

week or so, mostly having to do with oil prices," said Matthew

Keator, managing partner in the Keator Group, a wealth

management firm in Lenox, Massachusetts. "The run-up that we saw

in the equity markets this past week was a direct correlation to

the decline in oil prices. As the Iranian conflict ebbs and

flows, the market is responding accordingly."

Stocks added to their gains after Trump said no Israeli troops

would go into Beirut after a call with Israeli Prime Minister

Benjamin Netanyahu.

Nvidia ( NVDA ) rose 5.8% after the company unveiled a new chip

that puts AI capabilities directly into personal computers.

The chip is the result of a three-year partnership with

Microsoft ( MSFT ) to "reinvent the PC" for the AI era, Nvidia ( NVDA )

CEO Jensen Huang said. Microsoft ( MSFT ) shares added 2.3%.

The reaction among semiconductor stocks was mixed. Qualcomm ( QCOM )

tumbled 8.2%, while Intel ( INTC ) fell 4.4%. Micron

shares breached the $1,000 mark for the first time,

rising 7.0%.

The Philadelphia SE Semiconductor Index advanced

1.5%.

In economic news, U.S. factory activity expanded in May for the

fifth consecutive month as goods-makers navigate tariff and

geopolitical crosswinds.

Investors will turn to Friday's jobs report ahead of Kevin

Warsh's debut policy meeting as chairman of the U.S. Federal

Reserve this month, amid fears of rising inflation linked to the

Iran war that could upend the stock market rally.

The Dow Jones Industrial Average rose 4.68 points, or

0.01%, to 51,037.14, the S&P 500 gained 32.39 points, or

0.43%, to 7,612.45 and the Nasdaq Composite

gained 187.27 points, or 0.69%, to 27,159.89.

Of the 11 major sectors in the S&P 500, only technology

and energy enjoyed gains, while utilities

suffered the biggest percentage drop.

Software stocks rebounded from the heavy selling earlier

this year on AI disruption fears. ServiceNow ( NOW ) and IBM ( IBM )

rose 9.0% and 7.3%, respectively. The software services

index advanced 4.3%.

Cadence Design Systems ( CDNS ) added 8.8% after launching

an Nvidia ( NVDA )-powered AI agent for chip design.

Broadcom's ( AVGO ) earnings, due on Wednesday, will be

closely parsed in the wake of solid results from Dell

last week, which signaled strong AI server demand.

Declining issues outnumbered advancers by a 1.05-to-1 ratio

on the New York Stock Exchange. There were 426 new highs and 121

new lows on the NYSE.

On the Nasdaq, 2,426 stocks rose and 2,364 fell as advancing

issues outnumbered decliners by a 1.03-to-1 ratio.

The S&P 500 posted 27 new 52-week highs and 17 new lows

while the Nasdaq Composite recorded 102 new highs and 67 new

lows.