There had been doubts as to whether the meeting would take place after a gunman at the wheel of a heavy truck ploughed into a crowd celebrating France's national day in Nice, killing at least 84 people.
A decision was made for the event to go ahead although a statement earlier on Thursday said the programme would be kept "strictly to the sporting events with no festivities".
Semenya streaked away to finish in 1:55.33, more than a second ahead of her previous world leading time of 1:56.64.
Semenya, who had to undergo gender testing before being cleared to compete as a woman after winning the world championship in 2009, powered away on the home straight to shave 12 hundredths of a second off her personal best.
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World indoor champion Francine Niyonsaba trailed in second, with Kenya's Jepkoech Eunice in third.
"I was expecting to run under 1:56," Semenya said, before adding that she was looking forward to winning gold in Rio. "You have to believe in yourself and that's what I did today."
DOMINANT WIN
Schippers, the heptathlete-turned-sprinter, claimed a dominant win in the 100m, crossing the line in 10.94 seconds, a long way clear of Jamaica's Veronica Campbell-Brown (11.12) and South Africa's Carina Horn (11.14).
"I feel in shape, the race was fine, but the last 20 metres were harder, I could feel it," said Schippers, the world 200 metres champion.
Kenya's former Olympic and three times world champion Asbel Kiprop was beaten into sixth place in a fast-paced 1500 metres that was won by his 20-year-old compatriot Kwemoi.
After leading the majority of the race, Kiprop faded to finish in 3:32.03, as Kwemoi kicked in the home straight to streak clear, crossing the line in 3:30.49.
Farah, Britain's 5,000 and 10,000m Olympic gold medallist trailed home in fifth in 3:31.74, behind Kenya's second-placed Elijah Motonei Manangoi (3:31.19), Algeria's Makhloufi (3:31.35) and Abdelaati Iguider of Morocco (3:31.54).
"I still get away with a positive feeling," said Farah. I'm a 5k to 10k guy and I just ran 3:31, so that's good."
(Reporting by Toby Davis; Editing by Ken Ferris)
