U.S. equities moved higher at midday on Tuesday, propelled by a strong rally in semiconductor shares. However, the advance failed to mask underlying disparities in market breadth, signaling that investor confidence remains selective.
Key indices performance
The Nasdaq Composite climbed 1.29% to 25,837.24, while the S&P 500 rose 0.81% to 7,503.75. The Dow Jones Industrial Average added 0.74% to 52,221.77, and the Russell 2000 gained 1.04% to 2,973.05. The standout performer was the PHLX Semiconductor Index, which surged 4.90% to 12,318.99—roughly six times the pace of the S&P 500.
Semiconductor rebound
Tuesday’s rally recouped about 20% of the chip index’s decline from its June 22 record through Monday. Despite the bounce, the semiconductor gauge remains nearly 16% below that peak. The recovery was concentrated in memory and storage names, with Micron Technology (NASDAQ:MU) jumping 10.2% to $953.95, SanDisk (NASDAQ:SNDK) gaining 11.3% to $1,548.55, and Western Digital (NASDAQ:WDC) rising 11.7% to $544.59. Nvidia (NASDAQ:NVDA) advanced a more modest 1.4% to $206.13.
Breadth concerns persist
While advancing issues on the Nasdaq outnumbered decliners by a ratio of 1.47-to-1, the number of stocks hitting new lows (64) was nearly triple those reaching new highs (22). This disparity suggests that buying is still heavily skewed toward the most beaten-down AI-related names, with no broad rotation into riskier assets. Data collected from 11:48 a.m. to 12:03 p.m. EDT underscores the uneven participation.
Software stocks under pressure
In contrast to the semiconductor strength, software shares declined. Adobe (NASDAQ:ADBE) fell 2.7%, Workday (NASDAQ:WDAY) dropped 3.2%, and Salesforce (NYSE:CRM) decreased 2.1%. The moves followed a downgrade and price-target reduction by Morgan Stanley (NYSE:MS), highlighting that investors remain discerning within the technology sector.
Earnings season in focus
Market participants are now looking ahead to results from Alphabet (NASDAQ:GOOGL) and Intel (NASDAQ:INTC), scheduled for later this week. According to Art Hogan, chief market strategist at B. Riley Wealth, the recovery still needs validation. “We need to hear from hyperscalers like Alphabet reaffirming their CapEx spending plans,” Hogan said. Intel shares rose 7.0% to $103.84 ahead of its report, raising expectations for its guidance.
Notable movers outside tech
Away from the technology sector, 3M (NYSE:MMM) surged 9.1% to $173.53 after raising its 2026 profit outlook. The company now expects adjusted earnings per share between $8.80 and $8.95. Conversely, Danaher (NYSE:DHR) tumbled 13.8% to $173.35 after tightening its full-year core revenue growth forecast to a range of 3% to 4%.
Broader risks remain
Risk appetite stayed subdued as oil prices and bond yields weighed on sentiment. Brent crude hovered around $90.86 per barrel, while the two-year Treasury yield slipped to 4.2% following Monday’s decline. Key risks include an escalation of the U.S.-Iran conflict, additional tariffs, or a slowdown in cloud-related capital expenditures—any of which could undo the chip sector’s rebound. For now, investors are buying the steepest declines in semiconductors, but breadth indicators suggest the broader market recovery remains incomplete.
