Stocks ended Tuesday with modest gains as renewed buying interest in semiconductor stocks helped offset a mixed showing across the broader market. The Nasdaq Composite (+0.7%) led the major averages, while the S&P 500 (+0.3%) and DJIA (+0.3%) logged smaller advances during a session that otherwise featured relatively limited conviction.

Chip stocks provided the clearest source of leadership after coming under considerable pressure over the past several sessions. The PHLX Semiconductor Index gained 1.4%, lifting the information technology sector (+1.0%) to the top of the sector standings. NVIDIA (NVDA 212.95, +4.47, +2.14%) broke a seven-session losing streak ahead of its earnings report Wednesday after the close, while Super Micro Computer (SMCI 38.45, +3.28, +9.33%) ranked among the best-performing S&P 500 components after Cisco (CSCO 111.11, +0.88, +0.80%) expanded its NVIDIA AI partnership to include Supermicro rack-scale systems in its Secure AI Factory.

Strength among large chipmakers also helped the Vanguard Mega Cap Growth ETF rise 0.6%, although performance among mega-cap stocks outside of the semiconductor trade was less consistent. SpaceX (SPCX 137.97, +2.97, +2.20%) was a notable standout after confirming that construction of its Starbase launch facility in Louisiana will begin in 2027, while Meta Platforms (META 570.05, +11.03, +1.97%) provided support for the communication services sector (+0.5%).

The health care sector (+0.3%) also edged higher, with Moderna (MRNA 158.83, +19.94, +14.36%) again standing out. The stock continued its volatile stretch following last week's triple-digit surge on positive melanoma vaccine results, rebounding sharply after some recent profit-taking.

The positive finish for the major averages contrasted with weakness across several areas that had performed better recently. Retail stocks generally struggled, contributing to a 0.9% decline in the consumer staples sector and a 0.3% loss in the consumer discretionary sector. Athletic apparel stocks were a particularly weak pocket following Dick's Sporting Good's (DKS 124.31, -55.02, -30.68%) earnings report, which featured disappointing results from Foot Locker. NIKE (NKE 39.48, -1.28, -3.13%) finished as the worst-performing DJIA component, while Deckers Outdoor (DECK 88.74, -3.34, -3.63%) and lululemon athletica (LULU 118.33, -4.45, -3.62%) were also notable S&P 500 laggards as the results weighed on sentiment across the group.

Oil provided another notable crosscurrent. Crude oil futures settled $2.69 lower (-3.2%) at $82.29 per barrel amid a relatively quiet day of geopolitical headlines, sending the energy sector (-1.7%) to the bottom of the sector standings. The decline in crude was more constructive for oil-sensitive areas of the market, while Treasury yields also moved lower across the curve.

Ultimately, Tuesday's advance was driven more by a return to semiconductor stocks than by broad-based buying. The rebound in chips was enough to lift the major averages and give the Nasdaq a clear edge, while broader participation was mixed. The subdued overall tone came ahead of a potentially more consequential Wednesday, when the July Personal Income and Spending report will provide an update on the Fed's preferred inflation gauge before NVIDIA reports earnings after the close.

U.S. Treasuries had a solid outing on Tuesday, adding to their gains from the start of the week with some help from falling energy prices. The U.S. Treasury kicked off this week's note auction slate with a good $69 billion 2-year note offering ahead of tomorrow's $70 billion 5-year note sale.

• Russell 2000: +21.3% YTD
• S&P Mid Cap 400: +15.0% YTD
• Nasdaq Composite: +12.5% YTD
• S&P 500: +12.2% YTD
• DJIA: +11.5% YTD

Reviewing today's data:

• June FHFA Housing Price Index 0.0%; Prior 0.3%
• July S&P Case-Shiller Home Price Index 2.1% (Briefing.com consensus 1.8%); Prior 1.6%
• August Consumer Confidence 89.4 (Briefing.com consensus 90.6); Prior was revised to 90.2 from 90.8
  • The key takeaway from the report is that the overall decrease in sentiment was owed to another worsening in the Expectations Index, which was somewhat offset by a rebound in the Present Situation Index after three months of deterioration.
• July New Home Sales 607K (Briefing.com consensus 620K); Prior was revised to 678K from 628K
  • The key takeaway from the report is that changes in monthly sales varied greatly by region, but the overall pace of sales slowed. This increased the month's supply of new homes for sale, which could result in some pressure on prices.