Wall Street closed sharply higher on Tuesday, with the Dow Jones Industrial Average gaining 384.46 points (0.74%) to 52,223.72, as a strong recovery in semiconductor stocks lifted market sentiment. The S&P 500 advanced 0.86% to 7,507.32, and the Nasdaq Composite climbed 1.26% to 25,829.61, driven by technology shares ahead of a busy week of Big Tech earnings reports.
The rally followed a volatile start to the week, as investors weighed ongoing U.S.-Iran tensions, rising oil prices, and new tariff announcements against expectations for robust corporate earnings. Information technology was the best-performing sector among the S&P 500's 11 groups, while consumer staples lagged.
Chip Stocks Lead the Charge
Semiconductor shares powered the broader market higher after recent steep losses. The VanEck Semiconductor ETF (SMH) surged 4%, with Micron Technology jumping 12%, Intel rising 8%, Marvell Technology climbing over 6%, and Astera Labs adding 3%. The Philadelphia Semiconductor Index extended its recovery for a second straight session, after ending last week more than 20% below its late-June record high—confirming a bear market. Despite the correction, the index remains up nearly 75% year-to-date.
The rebound comes as investors anticipate earnings from major tech firms including Alphabet, IBM, Intel, Tesla, and Texas Instruments, with a focus on artificial intelligence spending and semiconductor demand. The second-quarter earnings season has started strongly: according to FactSet, nearly 88% of the roughly 66 S&P 500 companies that have reported so far have beaten analysts' earnings expectations.
Corporate Earnings Boost Individual Stocks
Several companies posted strong results. Shares of 3M gained more than 7% after reporting better-than-expected second-quarter earnings and raising its full-year profit outlook. General Motors climbed 5% after beating Wall Street estimates for both revenue and earnings. Hasbro also advanced after lifting its annual revenue and profit forecasts. On the downside, Danaher, MSCI, and Genuine Parts declined after issuing weaker outlooks or disappointing results.
For more on 3M's performance, see 3M Shares Surge 10% as Q2 Earnings Beat and Raised Outlook Signal Margin Resilience.
Geopolitical and Trade Risks in the Background
Markets largely looked past ongoing geopolitical developments. U.S. Central Command conducted its 10th consecutive night of strikes on Iran after President Donald Trump declared the ceasefire "over." Iranian forces continued attacks on U.S. military assets, while Yemen's Iran-aligned Houthis threatened a blockade on commercial shipping in the Red Sea. Reports indicated mediators have proposed a 10-day ceasefire between the U.S. and Iran.
Oil prices remained elevated: West Texas Intermediate crude rose about 2% to nearly $85 per barrel, while Brent crude traded around $91 after reaching five-week highs. Two oil tankers carrying Saudi crude to Asia reportedly reversed course in the Red Sea following Houthi threats.
Investors also assessed President Trump's announcement of 50% tariffs on a broad range of Canadian imports. Despite these trade and geopolitical risks, market attention remained centered on corporate earnings and the outlook for AI investment as the technology sector prepares to report quarterly results.
For a deeper look at upcoming earnings, see Options Data Signals Tesla Stock Could Rally 5%+ After Q2 Earnings and Alphabet Q2 Earnings: Cloud Growth and Gemini Delay Test AI Investment Thesis.
This article is for informational purposes only and does not constitute financial advice.
