Stocks rise as a semiconductor rebound leads tech: Tuesday recap

U.S. stocks rebounded Tuesday, snapping a three-session slide as beaten-down semiconductors drew buyers back to the market. The S&P 500 rose 0.83% to close at 7,509.20, and the Dow Jones Industrial Average added 0.69% to 52,224.64. The Nasdaq led the majors. The Nasdaq-100 tracking QQQ fund climbed 1.85%, and the Nasdaq Composite ended at 25,837.21. Small caps were not left behind. The Russell 2000 tracker rose 1.45%, keeping pace with the broader advance and outrunning the large-cap gauges. The S&P 500 and the Dow had each fallen in the prior three sessions, and Tuesday’s turn reversed the recent direction of trade.

The gains ran through technology. The Technology Select Sector SPDR (XLK) jumped 2.89%, well clear of every other group, as chip names rebounded from a steep summer selloff. Energy (XLE) rose 0.97% and Health Care (XLV) added 0.63%, giving the advance a base beyond tech. The soft spots were defensive. Consumer Staples (XLP) fell 0.94%, the weakest sector on the day, and Communication Services (XLC) eased 0.69%. Utilities and Real Estate (XLU, XLRE) finished a hair lower, with no safe-haven bid in evidence. XLK’s 2.89% gain more than doubled the next-strongest group’s advance, a measure of how concentrated the leadership was. Seven of the eleven sectors closed higher, and the strength sat squarely in the growth-tilted corners of the market.

The catalyst was semiconductors. Chip shares had sold off hard over the past few weeks, and on Tuesday the trade reversed. Investors moved back into the group ahead of a heavy stretch of Big Tech earnings, and a closely watched semiconductor gauge climbed 5.2% on the session. Nvidia added to the mood after disclosing a 9.3% stake in an AI-cloud infrastructure provider, a signal that the industry’s largest player is still spending to build capacity. Traders were also positioning for results from the sector’s bellwethers later in the week, and the anticipation was enough to spark a broad bid across chipmakers. The buying rippled across the complex and pulled the major averages out of their recent slide.

Breadth pointed to genuine risk appetite. The Russell 2000 tracker’s 1.45% gain topped the S&P 500, a sign the move reached well past the biggest names. Volatility came down sharply. The Cboe Volatility Index (VIX) dropped 8.58% to 17.05, a reading that points to calm on the trading floor, and the 10-year Treasury yield slipped to 4.55%. The bounce did not erase the week’s damage. Measured over the past five sessions, the QQQ is still down 1.49% and the S&P 500 tracker off 0.47%, while the Russell 2000 tracker has stayed slightly positive over the stretch.

The calendar gets busier from here. Tesla reports after Wednesday’s close and Intel follows Thursday, part of a widening earnings season that will test how results and guidance land against expectations. Flash purchasing-managers surveys and new-home-sales figures arrive Friday. As more of the market reports each day, single-company results tend to carry more weight for the indexes than they did during the quieter start to the week. Tuesday’s session leaves the major benchmarks higher and the recent slide, for now, behind them.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.