Dow jumps 230 points as chip stocks rebound ahead of Big Tech earnings

US stocks opened higher on Tuesday, led by a rebound in semiconductor stocks, as investors shifted their focus toward upcoming Big Tech earnings while continuing to monitor developments in the conflict between the United States and Iran.

The Dow Jones Industrial Average gained 234 points, or 0.45%, while the S&P 500 advanced 0.58%.

The Nasdaq Composite outperformed with a 0.8% gain, supported by strength in chipmakers after a sharp selloff over the past several sessions.

The recovery came despite continued geopolitical uncertainty, with markets balancing reports of renewed ceasefire efforts between the US and Iran against the risk of broader regional tensions affecting global energy supplies.

Semiconductor stocks lead market rebound

Semiconductor shares drove gains in trading after recent heavy losses.

The iShares Semiconductor ETF (SOXX) rose 4.5%, marking its second consecutive day of gains, while the VanEck Semiconductor ETF (SMH) climbed more than 3.2%.

Among individual stocks, Marvell Technology, Micron Technology and Astera Labs each advanced more than 5%.

Intel gained more than 6% ahead of its quarterly earnings report later this week.

The semiconductor sector has faced increased selling pressure in recent weeks as investors questioned whether the industry's rally had become overextended.

The Philadelphia Semiconductor Index ended Friday more than 20% below its late-June record high, confirming a bear market. Despite the decline, the index remains up about 66% for the year.

Investors are expected to closely watch earnings from major technology companies, including Alphabet, Intel, IBM and Tesla, for updates on artificial intelligence spending and capital expenditure plans.

According to FactSet, 87% of the roughly 54 S&P 500 companies that have reported second-quarter earnings so far have exceeded analysts' earnings estimates.

Iran conflict and oil prices remain in focus

Markets continued to monitor geopolitical developments after reports that Tehran had received a proposal from mediators for a 10-day ceasefire with the United States.

At the same time, tensions remained elevated after Yemen's Iran-aligned Houthis announced plans to impose a naval blockade on Saudi Arabia, raising concerns about disruptions to global energy supplies and trade.

Military activity also continued, with US Central Command carrying out its 10th consecutive night of strikes on Iran, while Tehran's forces targeted US military assets in the Middle East.

Oil prices remained volatile as investors weighed the competing developments.

West Texas Intermediate crude rose about 2% to trade above $85 per barrel, while Brent crude gained roughly 2% to move above $91 per barrel after earlier fluctuations.

Earnings and tariffs shape investor sentiment

Corporate earnings continued to influence trading activity ahead of a busy reporting week.

Shares of 3M climbed more than 8% after the industrial company reported better-than-expected second-quarter results and raised its full-year profit forecast.

General Motors also exceeded Wall Street expectations on both revenue and earnings for the second quarter.

Not all sectors participated in the rally. Halliburton declined 7.1% despite reporting quarterly profit above analysts' estimates.

Software stocks also came under pressure after Morgan Stanley lowered ratings and price targets on several companies.

Adobe, Intuit, Workday and Salesforce each fell more than 2% in trading.

Investors were also assessing trade policy developments after President Donald Trump announced 50% tariffs on a broad range of Canadian imports.

In addition, a Financial Times report said the administration is expected to introduce fresh tariffs on dozens of countries this week as the current 10% global tariff is set to expire on Friday.