• Technology and semiconductor shares drive the rally, with the S&P 500 up 0.70% and Nasdaq up 1.2% intraday.
  • Falling oil prices add support as investors monitor U.S.-Iran peace prospects.
  • Apple (NASDAQ:AAPL) bucked the trend, sliding on margin warnings, while software names lagged.

Tech-Fueled Rebound

U.S. stocks climbed on Tuesday, with technology and semiconductor shares leading a broad rebound that lifted the S&P 500 by 0.70% and the Nasdaq by 1.2% intraday. The gains, while striking, are not uniform: seven of the S&P 500’s 11 sectors were trading lower earlier in the session, according to Reuters, even as chipmakers rallied. Nvidia (NASDAQ:NVDA) rose 2.9%, Broadcom (NASDAQ:AVGO) added 3.1%, and Advanced Micro Devices (NASDAQ:AMD) jumped 4.6% in earlier trading, while the Philadelphia semiconductor index gained 2.7%. AMD’s earnings, due after the close, are a key focal point for investors seeking confirmation that the AI-driven demand story remains intact.

The advance follows a bruising stretch for technology stocks. On Monday, the S&P 500 surrendered an early gain of as much as 1.1% and closed down 0.5%; the Nasdaq finished down 1.1%. Both reached three-month closing lows, underscoring the fragility of the current rebound. “The market is trying to find its footing, but it’s too early to call this a durable recovery,” said one portfolio manager, who asked not to be named because he is not authorized to speak publicly.

Apple, Oil, and Elections

Not every tech giant participated in the rally. Apple shares fell roughly 2% to 3% in morning trading after the company warned that rising memory-chip costs would pressure holiday-quarter gross margins. The warning highlights a stark divergence within the sector: while chipmakers benefit from pricing power, hardware makers face margin compression.

Falling oil prices provided an additional tailwind. Brent crude was down more than 1% on Tuesday, extending the previous session’s sharp decline, as investors monitored prospects for a U.S.-Iran peace agreement. Lower fuel costs had already lifted airlines and cruise operators on Monday. Meanwhile, the U.S. midterm elections kept investors on edge, though available reporting does not establish a particular outcome as the cause of the rally. “The market is looking for any sign of stability, and today it found one in tech and energy,” said a strategist at a major brokerage, speaking on condition of anonymity.

Fragile Prospects

The broader question is whether the rally can hold through the close. Recent history suggests caution: Monday’s reversal showed that intraday gains can evaporate quickly. Software-related names, including Gartner (NYSE:IT), Thomson Reuters (NASDAQ:TRI), and Shopify (NASDAQ:SHOP), fell after earnings reports, reflecting ongoing skepticism about growth prospects outside semiconductors. “The bifurcation between chips and software is a key signal,” said the strategist. “Investors are rewarding tangible AI exposure and punishing anything that looks like a cost center.”

The immediate catalysts are AMD’s earnings after the bell, the outcome of the midterm elections, and any further developments on the U.S.-Iran front. For now, the rebound is a welcome reprieve for technology-heavy portfolios, but it remains narrowly based and vulnerable to reversals. As one trader put it, “We’ve seen this movie before—strong morning, weak afternoon. The close is what matters.”

Correction: An earlier version of this article misstated the timing of the S&P 500 and Nasdaq gains. They are intraday figures as of 1:37 p.m. EST, not closing results.