US STOCKS-Nvidia, other chip stocks lift Wall Street, investors await trade talks

By Saeed Azhar, Kanchana Chakravarty and Sukriti Gupta

NEW YORK, June 3 (Reuters) - U.S. stock indexes rose on Tuesday, helped by gains in Nvidia and other chipmakers, as investors awaited possible negotiations between the United States and its trading partners for more clarity on Washington's tariff plans.

President Donald Trump and Chinese leader Xi Jinping are set to speak this week, the White House said on Monday, days after Trump accused China of violating an Geneva agreement to roll back tariffs and trade restrictions. Beijing said it would safeguard its interests and that the accusation was groundless.

The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters.

"The most important thing for investors is that the administration wasn't going to impose those much-larger-than-expected tariffs and just leave them on, which would have almost certainly led to a recession," said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management.

"The fact that the U.S. is actively engaged with so many trading partners – China, the UK, Japan, the EU, etc. – has investors feeling more optimistic that we will avoid a recession."

In May, a softening of Trump's harsh trade stance allowed a recovery in risky assets, with the benchmark S&P 500 .SPX and the tech-heavy Nasdaq .IXIC posting their biggest monthly percentage gain since November 2023.

The S&P 500 remains about 2.8% away from its record peak touched in February.

At 02:04 p.m. the Dow Jones Industrial Average .DJI rose 208.99 points, or 0.49%, to 42,514.47, the S&P 500 .SPX gained 31.97 points, or 0.54%, to 5,967.91 and the Nasdaq Composite .IXIC gained 156.36 points, or 0.81%, to 19,398.98.

Only three of the 11 major S&P 500 sub-sectors were down.

Information technology stocks .SPLRCT rose 1.2%, boosted by a 2.5% rise in Nvidia NVDA.O. Chipmaker Broadcom AVGO.O hit a fresh record high after the company said it has begun to ship its latest networking chip that aims to speed AI. It was last up 1.7%.

A U.S. Labor Department report showed job openings increased in April, but layoffs picked up, signaling a slowing labor market as tariffs impact the economic outlook.

Factory orders dropped sharply in April, as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department's Census Bureau showed a 3.7% fall, after an unrevised 3.4% jump in March.

Monthly jobs data on Friday will offer more signs on how trade uncertainty is affecting the world's biggest economy.

Central bank officials, including Fed Board Governor Lisa Cook, Chicago Fed President Austan Goolsbee and Dallas President Lorie Logan are due to speak through the day.

Shares of Kenvue KVUE.N lost 6%, leading declines on the benchmark S&P index. The company, which makes consumer health products, said at a Deutsche Bank conference that retailers in the U.S. and China are destocking products due to uncertainty over tariffs.

Dollar General DG.N jumped 15% as the discount retailer raised its annual sales forecast after surpassing quarterly sales expectations.

Shares of image-sharing platform Pinterest PINS.N surged 4% after JPMorgan raised the stock to overweight from neutral.

Advancing issues outnumbered decliners by a 2.4-to-1 ratio on the NYSE. There were 141 new highs and 45 new lows on the NYSE.

On the Nasdaq, advancing issues outnumbered decliners by a 2.18-to-1 ratio.

The S&P 500 posted 29 new 52-week highs and 4 new lows, while the Nasdaq Composite recorded 83 new highs and 46 new lows.