US stocks rise as semiconductor rebound offsets geopolitical tensions

US stock markets advanced on Tuesday, 21 July 2026, as a robust recovery in semiconductor shares helped investors overcome concerns surrounding escalating geopolitical tensions in the Middle East and the introduction of significant new trade tariffs. The rally, which saw all three major indices close higher, was driven by a distinct shift in investor sentiment toward the technology sector ahead of a critical week for quarterly earnings reports.

The Nasdaq Composite led the gains, rising 329.13 points, or 1.29 per cent, to close at 25,837.21. The S&P 500 gained 65.92 points, or 0.89 per cent, to reach 7,509.20, while the Dow Jones Industrial Average rose 385.38 points, or 0.74 per cent, to 52,224.64. A primary catalyst for this momentum was the Philadelphia SE Semiconductor Index, which recorded a 5.2 per cent rally, marking its second consecutive daily gain. This recovery follows a period where the index had finished the previous Friday more than 20 per cent below its late-June record high.

Media additions

"Investors are really buying back in to the semis ahead of earnings because they have fear of missing out (FOMO), that these companies could report outsized earnings beats and increase their outlooks and they don’t own as much as they did before the most recent pullback."

Lindsey Bell, chief investment strategist at 248 Ventures, via Businesstimes

The global environment remains a point of friction for traders. Oil prices settled up 2 per cent after reaching five-week highs, influenced by reports of new military action in Iran and threats from Iran-aligned Houthi forces to impose a blockade on commercial shipping in the Red Sea. Despite these risks, some analysts suggest investors view the volatility as transitory, particularly as they look toward upcoming midterm elections and potential diplomatic mediation, including a proposed 10-day ceasefire between the United States and Iran.

Equity investors also appeared to move past the administration's decision to implement a 50 per cent tariff on a broad range of Canadian imports on Monday. According to data provided by Analyticsinsight, roughly 88 per cent of the S&P 500 companies that have reported results thus far have surpassed profit expectations.

"The next two weeks will be a defining stretch for earnings, and not just for tech. Companies missing Wall Street’s high expectations face stronger selling pressure than they did during the previous quarter."

Bret Kenwell, eToro, via Analyticsinsight

Individual stock performance highlights the market's current volatility. 3M shares rallied 7.3 per cent after lifting its full-year profit forecast, and Hasbro shares jumped 8.8 per cent following raised annual revenue and profit projections. In contrast, Danaher shares fell 11 per cent after the company trimmed its core revenue growth outlook, and MSCI shares dropped 10 per cent due to an increased operating expense forecast. Within the semiconductor sector, specific companies saw significant inflows; Sandisk gained 14.3 per cent, Western Digital rose 12.5 per cent, and Micron Technology advanced 12.2 per cent.

Wider industry context from firms like Axcelis Technologies suggests a focus on the long-term cycle for memory chips. Leadership at Axcelis has noted a meaningful uptick in memory demand, particularly for high bandwidth memory used in artificial intelligence, while projecting a broader return to industry growth in 2027.

What to Watch Next

• Upcoming Tech Earnings: Market focus remains on results from major industry players including Alphabet, Intel, Texas Instruments, IBM, and Tesla.
• Tariff Developments: Reports indicate the White House may announce additional tariffs on dozens of countries before the current 10 per cent global tariff policy expires this Friday.
• Energy and Geopolitics: Traders continue to monitor potential progress in ceasefire negotiations between the United States and Iran, which may serve to dampen upward pressure on oil prices.

As the market progresses through the remainder of the week, the tension between strong earnings expectations and broader macroeconomic risks remains the primary narrative for investors. Market volume on Tuesday remained relatively light, with 16.14 billion shares changing hands compared with the 19.56 billion moving average for the previous 20 sessions.