* Indexes: Dow down 0.35%, S&P 500 flat, Nasdaq up 0.15%

* 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

(Updates after market open)

By Medha Singh and Twesha Dikshit

June 1 (Reuters) - Wall Street's main indexes hovered

near record highs on Monday as investors weighed Nvidia's ( NVDA ) latest

artificial intelligence push against mounting skepticism that a

deal to end the three-month-old U.S.-Iran war could be reached

soon.

Nvidia ( NVDA ) rose 4% after unveiling a new chip that puts

AI capabilities directly into laptops and desktop 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 2.5%.

The S&P 500 tech index gained 1.5%.

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

tumbled 6%, while PC chipmakers AMD and Intel

fell 3.1% and 4.4%, respectively. Micron rose 5.7% to

$1,022, topping the $1,000 mark for the first time. Its shares

have soared nearly 90% in May.

"Nvidia ( NVDA ) might expand the market, but most of its gains will

come at the expense of the incumbents," said Brian Jacobsen,

chief economic strategist at Annex Wealth Management.

Memory makers such as Micron stood to benefit because their

chips complement the processors that go into new computers, and

an AI-driven refresh cycle could lift the premium end of the PC

market, he said.

The mood was somber, with oil prices climbing 5% after

Tasnim news agency reported that Iran's negotiating team was

stopping talks with the U.S. over attacks on Lebanon.

Nine of the 11 main S&P 500 sectors were in the red, with

consumer discretionary leading declines with a 2%

fall.

At 09:40 a.m. the Dow Jones Industrial Average lost

177.00 points, or 0.35%, to 50,855.46, the S&P 500 rose

1.82 points, or 0.02%, to 7,581.88, and the Nasdaq Composite

gained 39.52 points, or 0.15%, to 27,012.14.

Software stocks also rebounded from the heavy selling

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

IBM ( IBM ) rose 10.7% and 6%, respectively. The software

services index advanced 3% after erasing all losses

from January-end.

Cadence Design Systems ( CDNS ) added 3% after launching an

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

Wall Street's main indexes ended May at record highs, buoyed

by hopes of an eventual end to the war and blowout first-quarter

earnings. Optimism around AI has helped boost U.S. equities, but

concerns over the economic impact from the hostilities remain.

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.

"Passing the baton from one chair to the next isn't always a

smooth process. If the Strait of Hormuz doesn't more fully open

before the next Fed meeting, it's almost certain that the Fed's

policy statement will become more hawkish," Jacobsen said.

Traders have priced in a near 70% chance of a quarter-point

rate hike before the end of the year.

Broadcom ( AVGO ) earnings on Wednesday will also be in

focus after a strong results forecast last week from AI-server

maker Dell.

Among other company movers, Taylor Morrison Home Corp ( TMHC )

jumped 22% after Berkshire Hathaway ( BRK/A ) agreed to

buy the homebuilder for $6.8 billion in cash.

Declining issues outnumbered advancers by a 1.65-to-1 ratio

on the NYSE and by a 1.45-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and 10 new lows,

while the Nasdaq Composite recorded 47 new highs and 29 new

lows.