U.S. stocks closed mixed on Tuesday as a rebound in semiconductor shares faded, weighing on the broader market despite easing oil prices and improving sentiment around Middle East tensions.
The S&P 500 slipped 0.26% to finish at 7,386.65, while the Nasdaq Composite fell 0.97% to 25,678.82. The Dow Jones Industrial Average bucked the trend, gaining 86.10 points (0.17%) to close at 50,872.11.
Semiconductor stocks came under pressure after Monday’s sharp recovery failed to hold. The iShares Semiconductor ETF (SMH) declined 1%, following a 6% rebound in the previous session. The fund had suffered its worst day in six years on Friday, plunging 10% as investors questioned whether the AI-driven chip rally had become overheated.
Among major chipmakers, Micron Technology fell 1%, giving back part of Monday’s 10% recovery after losing nearly 20% over two trading sessions last week. Broadcom also dropped 1%, as its recent rebound lost momentum following a steep selloff earlier in the week.
Earlier in the session, markets received support from falling oil prices as investors grew optimistic about a potential long-term ceasefire in the Middle East. Lower energy prices weighed on the energy sector, which declined 1.6%, but benefited other parts of the market.
The materials, consumer discretionary, and real estate sectors outperformed, with real estate stocks gaining after stronger-than-expected existing home sales data. Meanwhile, the information technology sector fell nearly 2%, leading market declines.
Investor enthusiasm for artificial intelligence remained strong after OpenAI reportedly filed confidentially for an IPO. Attention is also turning to SpaceX, which is expected to launch what could become the largest IPO in history on Friday. While many see the offering as another boost for the AI-driven bull market, some investors view its massive $1.75 trillion valuation as a potential sign that the sector may be approaching peak optimism.
