Stocks rose as technology led the advance: Tuesday recap

Stocks pushed to fresh records on Tuesday, and the largest technology names led a broad advance. It was a risk-on day. The S&P 500 rose 1.8% to 7,736.52, its first record close in weeks. The Dow gained 1.7% to 54,085.88, clearing 54,000 for the first time. The Nasdaq did the heavy lifting, up 3.4% to 26,584.99 as chip and AI-linked shares surged. The move capped a powerful stretch: the S&P 500 has climbed 4.1% over the past five sessions and the Nasdaq has gained 7.2%. The Dow has added 2.6% over the same five days, and the Russell 2000 2.8%.

Technology set the pace among sectors. The group climbed about 5.0% on the day and has now jumped more than 9% in a week, easily the strongest corner of the market. Materials and industrials followed, up 1.9% and 1.8%. Seven of the 11 sectors finished higher. Financials rose 0.9% and communication services added 0.6%. The laggards were defensive and rate-sensitive parts of the market: utilities slipped 0.6%, health care and real estate finished flat, and energy eased 0.5% as crude prices fell. Health care and utilities are also the week’s weakest groups, each down about 3%.

Two forces did most of the lifting. The AI and semiconductor trade, which wobbled through much of July, came roaring back as investors rewarded another round of upbeat results from large technology companies, and the chip-heavy part of the market led the tape higher. Semiconductors led the charge, extending the rebound that had gathered pace late last week. At the same time, crude oil fell sharply on hopes that the United States and Iran could reach a deal to reopen the Strait of Hormuz, a chokepoint that had kept a risk premium in energy prices for weeks. Iran’s foreign ministry said no formal negotiations were under way, so the move reflected optimism rather than a signed agreement. Cheaper energy and calmer geopolitics gave equities room to run.

Breadth was positive but concentrated. Small caps advanced too, with the Russell 2000 up 1.9%, roughly matching the Dow while trailing the megacap-driven Nasdaq. The largest growth names carried an outsized share of the gains, a pattern that has defined the past week. The split left the rally leaning on the market’s biggest companies, much as it did through the prior week. Volatility stayed low even as the market melted higher: the VIX sat at 16.5, near the bottom of its recent range, though it ticked up on the session. In the bond market, the 10-year Treasury yield held at 4.75%, leaving the backdrop for stocks little changed.

The economic calendar builds through the week toward Friday’s July employment report. Before that, investors get the ISM services survey and ADP’s private payrolls reading on Wednesday, then weekly jobless claims on Thursday. The claims report carries a forecast of 202,000, and the payrolls report a forecast of 80,000 jobs added with the unemployment rate holding at 4.2%. Several Federal Reserve officials are also on the speaking calendar later in the week. Earnings season rolls on as well, with several large consumer and energy companies due to report. The tape has its footing back.

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