U.S. stocks rallied on Tuesday, driven by strong gains in semiconductor shares, as investors shifted their focus from the ongoing U.S.-Iran conflict to a busy earnings season.
The Dow Jones Industrial Average climbed 385.38 points (0.74%) to close at 52,224.64. The S&P 500 gained 0.89% to finish at 7,509.20, while the Nasdaq Composite advanced 1.29% to 25,837.21. All three major indexes snapped their three-session losing streaks.
Corporate earnings boosted investor confidence. 3M surged more than 7% after reporting better-than-expected second-quarter results, while General Motors rose nearly 5% following earnings that exceeded analysts' expectations on both revenue and profit. The earnings season has started on a strong note, with nearly 88% of the approximately 66 S&P 500 companies reporting so far beating profit estimates, according to FactSet. Investors are now awaiting results from Alphabet, IBM, and Tesla later this week.
Chipmakers were among the market's strongest performers, providing significant support to the broader indexes. The VanEck Semiconductor ETF (SMH) climbed more than 4%, while Marvell Technology gained over 6%, Astera Labs rose 3%, Micron Technology jumped 12%, and Intel advanced 8%.
Tuesday's rebound followed Monday's sell-off, when investors reacted to renewed military tensions between the United States and Iran. According to reports, U.S. Central Command carried out its 10th consecutive night of strikes on Iran, while Tehran responded with attacks on U.S. military assets across the Middle East. Meanwhile, the Houthis announced a maritime embargo targeting Saudi Arabia.
Oil prices remained volatile as markets monitored fresh diplomatic efforts aimed at easing tensions. Reports indicated that mediators were proposing a 10-day ceasefire between the U.S. and Iran. West Texas Intermediate (WTI) crude rose 2% to $84.91 per barrel, while Brent crude gained 2% to $91.01 per barrel.
Energy prices had already moved sharply higher on Monday after President Donald Trump stated that Tehran would be held accountable for the deaths of three U.S. service members. The rise in oil prices weighed on equities during the previous session, although semiconductor stocks had already begun recovering from last week's steep declines.
