Wall Street's major indexes closed higher on Tuesday (Wednesday AEST), led by the Nasdaq, as a rebound in semiconductor stocks helped investors look beyond the latest Middle East tensions and renewed tariff concerns ahead of a pivotal week of technology earnings.
The Dow Jones Industrial Average rose 385.4 points, or 0.7%, to 52,224.6. The S&P 500 gained 65.9 points, or 0.9%, to 7,509.2, while the Nasdaq Composite climbed 329.1 points, or 1.3%, to 25,837.2.
Semiconductor shares staged a strong recovery, providing the biggest boost to the broader market. The Philadelphia SE Semiconductor Index jumped 5.2%, marking its second straight session of gains after finishing Friday more than 20% below its late-June record high.
Chipmakers had come under pressure last week amid concerns over elevated valuations and the scale of artificial intelligence-related investment.
Despite the recent pullback, the semiconductor index remains up almost 75% so far this year.
Among the S&P 500's top performers, Sandisk surged 14.3%, Western Digital advanced 12.5%, and Micron Technology gained 12.2%.
Investors largely brushed aside President Donald Trump's announcement of 50% tariffs on a broad range of Canadian imports, unveiled on Monday.
Markets also looked past escalating geopolitical tensions. Oil prices settled about 2% higher after reaching a five-week high when two tankers carrying Saudi crude to Asia reversed course in the Red Sea following threats from Yemen's Iran-backed Houthis to blockade commercial shipping.
Trump said the United States would respond if the Houthis carried out those threats.
Attention now turns to a busy earnings calendar, with investors awaiting quarterly results from Alphabet, Intel and Texas Instruments later this week.
Among individual companies, 3M climbed 7.3% after raising its full-year profit forecast.
Hasbro gained 8.8% after lifting its annual revenue and profit outlook, citing strong demand for its digital gaming portfolio and its Magic: The Gathering franchise.
Danaher was the weakest performer in the S&P 500, falling 11% after trimming its core revenue growth outlook and reporting weaker-than-expected biotechnology revenue.
MSCI dropped 10% after the index provider increased its full-year operating expense forecast despite posting quarterly revenue that exceeded analysts' expectations.
On the bond markets, the yield on the benchmark 10-year U.S. Treasury rose 0.7% to 4.626%, while the two-year Treasury yield increased 1.2% to 4.261%.
