The major averages finished mixed on Tuesday as continued strength in semiconductor stocks and improving participation beneath the surface offset pronounced weakness in financials and other pockets of the large-cap market. The S&P 500 ended unchanged following Monday's sizable advance, while the Nasdaq Composite (+0.5%) outperformed, reaching record highs. The DJIA (-0.4%) lagged, while the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.3%) showed relative strength.

Semiconductor stocks remained the clearest source of support throughout the session. The PHLX Semiconductor Index climbed 2.1%, helping the information technology sector (+0.6%) finish among the better-performing groups, with memory stocks again showing pronounced strength. Chip stocks reached fresh highs during the session after President Trump reiterated his support for continued AI development during his UN General Assembly address, saying the U.S. should be careful with the technology but should not stifle its growth.

The broader mega-cap picture was less supportive than Monday, however. The communication services sector (-1.0%) finished among the laggards after trading higher early in the session, limiting the benefit of semiconductor strength for the cap-weighted S&P 500. That divergence was evident in the stronger performance of small and mid-cap stocks, with the Russell 2000 and S&P Mid Cap 400 both comfortably outperforming the large-cap index.

The financials sector (-1.6%) remained a significant drag through the close. Selling extended across banks, regional banks, insurers, and asset managers amid increased attention to a flattening yield curve, technical weakness across several industry groups, and concerns about softer trading and investment banking activity. Charles Schwab (SCHW 100.35, -6.53, -6.11%), Allstate (ALL 229.36, -13.50, -5.56%), and Wells Fargo (WFC 83.16, -3.38, -3.91%) were particularly pressured, with the group's weakness weighing particularly heavily on the DJIA.

Allstate also faced another potential source of pressure after a New York Times report indicated that Meta Platforms' (META 736.60, -4.65, -0.63% )Muse AI agent has helped users find insurance, highlighting the potential for AI agents to disrupt established consumer-service channels. The same report initially pressured Expedia Group (EXPE 280.70, -0.32, -0.11%), although the stock subsequently recovered after Expedia announced a partnership with Muse to bring AI-powered trip planning to hotels and other travel offerings.

Strength elsewhere was fairly broad. The materials (+1.9%) and consumer staples (+1.2%) sectors finished atop the standings, while the health care sector (+0.6%) also outperformed as Moderna (MRNA 182.56, +9.62, +5.56%) extended its recent surge to fresh multi-year highs.

Homebuilders were another standout pocket of strength, with the iShares U.S. Home Construction ETF climbing 3.2%. Lennar (LEN 83.05, +4.97, +6.37%) remained a notable outperformer after Berkshire Hathaway increased its stake in the company, building on the group's early-session strength.

Crude oil ultimately finished lower despite recovering substantially from its overnight decline. WTI crude settled $0.56 lower (-0.6%) at $95.21 per barrel after President Trump said during his UN address that he believes Iran will reach a deal with the U.S. after the midterm elections. He later said U.S. representatives met with Iranian officials for three hours today in a meeting that went "very well."

The swings in crude were mirrored to some extent in the Treasury market. The overnight decline in oil initially helped pull yields lower, with the 2-year note yield reaching 4.71% and the 10-year note yield falling to 4.92%, before those moves reversed as crude recovered during the session. The 2-year note yield finished unchanged at 4.75%, and the 10-year note yield settled up one basis poiint to 4.97%.

Tuesday's session ultimately featured a sharp divide across the market, with semiconductor strength and gains among small and mid-cap stocks contrasting with pronounced weakness in financials and several mega-cap areas. That dynamic left the S&P 500 little changed, while continued strength in chip stocks helped propel the Nasdaq to record highs

There was no economic data of note today.

• Nasdaq Composite: +17.2% YTD
• Russell 2000: +16.4% YTD
• S&P 500: +13.4% YTD
• S&P Mid Cap 400: +11.2% YTD
• DJIA: +7.9% YTD