The major averages finished Tuesday's session with modest changes, recovering from more pronounced intraday weakness as a late improvement in semiconductor stocks helped stabilize the broader market. The S&P 500 (flat) ended near its unchanged level, while the Nasdaq Composite (-0.2%) and DJIA (-0.4%) registered small losses. The relatively quiet finish masked another session of uneven performance across individual stocks and sectors.

Semiconductor stocks were a central influence on today's trading, initially extending yesterday's decline amid concerns about increased competition from Chinese memory chipmakers. The PHLX Semiconductor Index (-0.2%) fell as much as 3.1% shortly after the open, reflecting pressure that also contributed to a 5.5% overnight decline in South Korea's Kospi. Memory names such as Micron (MU 953.19, -35.85, -3.62%) remained under pressure, but selling across the broader semiconductor group eased considerably as the session progressed. The recovery helped the information technology sector (+0.1%) finish with a slim gain after spending much of the morning in negative territory.

The improvement in semiconductor stocks also helped the Nasdaq Composite recover much of its earlier decline, although the index ultimately finished slightly lower. Five S&P 500 sectors closed higher, led by the energy sector (+1.8%), which continued its recent stretch of outperformance despite relatively little movement in crude oil prices. Refiners were particularly strong, with Marathon Petroleum (MPC 476.98, +18.17, +3.96%) and Valero Energy (VLO 456.46, +20.46, +4.69%) reaching fresh record highs. WTI crude settled $0.29 higher (+0.3%) at $94.06 per barrel.

The communication services sector (+0.9%) was another standout, benefiting from continued strength in Meta Platforms (META 762.50, +19.54, +2.63%).

On the other side of the sector standings, the health care sector (-1.3%) finished with the largest decline, weighed down by Johnson & Johnson (JNJ 248.61, -15.12, -5.73%) following its Q3 earnings report. Disappointing MedTech growth and a modest increase to full-year guidance overshadowed stronger pharmaceutical sales, leaving JNJ among the weakest DJIA components.

The industrials sector (-0.3%) also staged a notable recovery from its earlier losses, moving higher alongside semiconductor stocks after falling more than 1.0% around midday. However, Caterpillar (CAT 772.78, -26.59, -3.33%) remained a significant drag on the price-weighted DJIA as its recent retreat continued.

Meanwhile, the financials sector (-0.4%) finished modestly lower following mixed reactions to earnings from several major banks. Goldman Sachs (GS 891.91, -2.04, -0.23%) and JPMorgan Chase (JPM 331.43, -2.87, -0.86%) ceded earlier gains, while Citigroup (C 124.53, -7.39, -5.60%) and b80.74, -2.58, -3.10%) faced more pronounced pressure. Bank earnings remain in focus tomorrow, with Bank of America (BAC 53.96, -0.62, -1.14%) and Morgan Stanley (MS 186.66, -3.36, -1.77%) scheduled to report before the open.

Elsewhere, the Russell 2000 (-0.4%) continued to trail the S&P 500, while the S&P Mid Cap 400 (+0.1%) managed a slight gain.

On the geopolitical front, Axios reported that Israeli Prime Minister Benjamin Netanyahu and President Trump discussed the possibility of renewed strikes against Iran before the midterm elections. Trump reportedly indicated that he would not authorize additional strikes before the elections, although the Pentagon remains prepared should that position change.

Ultimately, the afternoon recovery in semiconductors and other technology-related stocks prevented the earlier selling from producing a more substantial decline in the major averages. Nevertheless, the uneven sector performance and continued weakness in select heavyweight stocks left the broader market with little directional momentum by the close.

U.S. Treasuries had a mostly higher start to the holiday-shortened week, but the front end finished flat after reversing from a higher start while longer tenors held onto a portion of their starting gains. The 2-year note yield finished unchanged at 4.79%, and the 10-year note yield settled down two basis points to 5.22%. 

• Nasdaq Composite: +17.1% YTD
• S&P 500: +14.0% YTD
• Russell 2000: +12.2% YTD
• S&P Mid Cap 400: +10.7% YTD
• DJIA: +7.5% YTD

Reviewing today's data: 

• Sep NFIB Small Business Optimism 97.9 (Briefing.com consensus 98.0; Prior 98.7)
• Existing home sales increased 1.5% month-over-month in September to a seasonally adjusted annual rate of 3.99 million (Briefing.com consensus 3.96 million) from a downwardly revised 3.93 million (from 3.98 million) in August. Sales were down 2.2% on a year-over-year basis.
  
  • The key takeaway from the report is that year-over-year sales were down in all four regions, reflecting persistent headwinds from high mortgage rates. As a result, August and September have been the slowest two months for home sales so far in 2026.