Wall Street rises as semiconductor stocks rebound despite Iran strikes and Trump tariff uncertaint
US stocks have opened higher as investors prepare for the release of earnings results from major technology companies.
Wall Street’s main indices have risen as a recovery in semiconductor shares helped shift the focus from concerns over fresh developments in the Middle East while investors awaited major tech earnings for clues on the future of the artificial intelligence trade.
US forces launched fresh strikes in Iran’s south and west in retaliation for the deaths of its soldiers.
A senior Iranian official told Reuters on Monday that Iran had received a proposal from mediators for a 10-day ceasefire.
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Recently battered semiconductor stocks were leading gains.
The Philadelphia SE Semiconductor index climbed 3.7 per cent, rising for the second consecutive day.
The index ended Friday more than 20 per cent below its late-June record high, confirming a bear-market decline.
But the chip gauge is up nearly 72 per cent on a year-to-date basis.
SanDisk, Western Digital and Micron Technology were up between 7.7 per cent and 10.2 per cent.
Lately, chip stocks have come under heavy pressure as investors question whether this year’s powerful rally in the sector has gone too far and scrutinise the lack of tangible returns on hefty investments by hyperscalers.
On the benchmark S&P 500, information technology led the gains with a 1.3 per cent rise.
“Investors have to juxtapose strong earnings against the ongoing war with Iran,” said Art Hogan, chief market strategist at B Riley Wealth.
“To end this tug-of-war, we need to hear from hyperscalers like Alphabet reaffirming their CapEx spending plans. Such affirmation from large players is likely to put a floor under the drawdown in semiconductor names.”
In early trading on Tuesday, the Dow Jones Industrial Average rose 171.34 points, or 0.33 per cent, to 52,010.60, the S&P 500 gained 30.20 points, or 0.41 per cent, to 7,473.48 and the Nasdaq Composite gained 172.68 points, or 0.68 per cent, to 25,680.75.
Investor focus this week will turn to results from Alphabet and Intel, which could help determine whether the AI trade has further room to run amid elevated profit expectations.
Adding to the uncertainty, US President Donald Trump on Monday unveiled 50 per cent tariffs on a wide range of imports from Canada.
The Financial Times reported that Trump is also expected to impose fresh tariffs on dozens of countries as soon as this week, with his 10 per cent global tariff poised to expire on Friday.
Among early movers, 3M shares gained 9.5 per cent after the industrial giant lifted its full-year profit forecast.
Danaher fell 13 per cent after the life sciences firm trimmed its core revenue growth outlook and reported weaker-than-expected revenue in its biotechnology business.
MSCI was down 11 per cent after the index provider raised its full-year operating expense forecast despite better-than-expected quarterly revenue.
Software stocks were also under pressure after Morgan Stanley cut ratings and price targets on some names.
Adobe, Intuit, Workday and Salesforce fell between 1.5 per cent and 2.6 per cent.
Advancing issues outnumbered decliners by a 1.19-to-1 ratio on the NYSE and by a 1.47-to-1 ratio on the Nasdaq.
The S&P 500 posted five new 52-week highs and five new lows while the Nasdaq Composite recorded 22 new highs and 64 new lows.
