U.S. equities opened higher on Tuesday, with the Dow Jones Industrial Average climbing 234 points (0.45%) as a broad rebound in semiconductor shares lifted market sentiment. The S&P 500 advanced 0.58%, while the Nasdaq Composite outperformed with a 0.8% gain, driven by strength in chipmakers following a sharp selloff over the past several sessions.
The recovery came as investors shifted their focus toward upcoming earnings reports from major technology companies, including Alphabet, Intel, IBM, and Tesla, which are expected to provide updates on artificial intelligence spending and capital expenditure plans. According to FactSet, 87% of the roughly 54 S&P 500 companies that have reported second-quarter results so far have exceeded analysts' estimates.
Semiconductor Stocks Lead the Rebound
Semiconductor shares drove gains after recent heavy losses. The iShares Semiconductor ETF (SOXX) rose 4.5%, marking its second consecutive day of gains, while the VanEck Semiconductor ETF (SMH) climbed more than 3.2%. Among individual stocks, Marvell Technology, Micron Technology, and Astera Labs each advanced more than 5%, and Intel gained over 6% ahead of its quarterly earnings report later this week.
The Philadelphia Semiconductor Index ended Friday more than 20% below its late-June record high, confirming a bear market. Despite the decline, the index remains up about 66% for the year. The sector had faced increased selling pressure in recent weeks as investors questioned whether the industry's rally had become overextended. For context on recent volatility, see our analysis on Celestica Stock Down 35% from 2025 High.
Geopolitical Tensions and Oil Prices
Markets continued to monitor geopolitical developments after reports that Tehran had received a proposal from mediators for a 10-day ceasefire with the United States. At the same time, tensions remained elevated after Yemen's Iran-aligned Houthis announced plans to impose a naval blockade on Saudi Arabia, raising concerns about disruptions to global energy supplies and trade.
Military activity continued, with U.S. Central Command carrying out its 10th consecutive night of strikes on Iran, while Tehran's forces targeted U.S. military assets in the Middle East. Oil prices remained volatile as investors weighed these competing developments. West Texas Intermediate crude rose about 2% to trade above $85 per barrel, while Brent crude gained roughly 2% to move above $91 per barrel after earlier fluctuations.
Earnings and Trade Policy Shape Sentiment
Corporate earnings continued to influence trading activity. Shares of 3M climbed more than 8% after the industrial company reported better-than-expected second-quarter results and raised its full-year profit forecast. General Motors also exceeded Wall Street expectations on both revenue and earnings for the second quarter.
Not all sectors participated in the rally. Halliburton declined 7.1% despite reporting quarterly profit above analysts' estimates. Software stocks came under pressure after Morgan Stanley lowered ratings and price targets on several companies, with Adobe, Intuit, Workday, and Salesforce each falling more than 2% in trading. For a look at another tech stock facing headwinds, see our piece on BlackBerry Stock Drops 35% from 2025 High.
Investors were also assessing trade policy developments after President Donald Trump announced 50% tariffs on a broad range of Canadian imports. Additionally, a Financial Times report indicated the administration is expected to introduce fresh tariffs on dozens of countries this week as the current 10% global tariff is set to expire on Friday.
As earnings season intensifies, market participants will closely watch results from Alphabet and Tesla later this week for signals on AI investment trends and broader tech sector health. The combination of geopolitical uncertainty, trade policy shifts, and corporate earnings will likely keep volatility elevated in the near term. For more on the broader market context, read our coverage of Dow Futures Surge 277 Points as Ceasefire Hopes Fuel Semiconductor Rebound.
This article is for informational purposes only and does not constitute financial advice.
