Stocks finished the second quarter on a strong note as another solid session across semiconductor names helped lift the S&P 500 (+0.8%), Nasdaq Composite (+1.5%), and DJIA (+0.3%). The DJIA notched another record closing high, capping off the strongest first half of the year for the Dow since 2021 and the best quarterly performance for the S&P 500 and Nasdaq Composite since 2020. Additionally, the S&P 500 and Nasdaq have now recovered nearly all of last week's pullback.

Semiconductor stocks once again led the market, with the PHLX Semiconductor Index climbing 3.9% to build on yesterday's rebound. Firm gains across major chipmakers such as Advanced Micro Devices (AMD 580.91, +41.42, +7.68%) and Intel (INTC 139.63, +7.91, +6.01%) were notched, while Sandisk (SNDK 2273.73, +223.34, +10.89%) led memory names higher, lifting the information technology sector (+2.6%) and reinforcing the return to mega-cap technology leadership that began earlier this week.

Technology leadership extended beyond semiconductors, though gains elsewhere were more selective. The Vanguard Mega Cap Growth ETF (+1.7%) posted another solid advance, with Apple (AAPL 289.36, +7.62, +2.70%) and Microsoft (MSFT 373.02, +4.45, +1.21%) adding to this week's gains.

The consumer discretionary sector (+0.1%) finished little changed as strength in Tesla (TSLA 420.60, +8.76, +2.13%) was offset by weakness elsewhere, while the communication services sector finished on its flat line despite another solid session from Alphabet (GOOG 353.33, +2.05, +0.58%).

Continued weakness in broadband and wireless providers, including Verizon (VZ 42.34, -1.76, -3.99%) and AT&T (T 20.69, -1.13, -5.18%), limited the sector's advance following Comcast's (CMCSA 24.55, +0.33, +1.36%) restructuring announcement earlier this week.

Outside of technology, participation was more narrow as momentum shifts back toward growth stocks. The industrials sector (+1.4%) finished as one of the day's top performers, supported by another strong session for electrical equipment companies that continued to move in tandem with semiconductor stocks. Caterpillar (CAT 1064.90, +31.71, +3.07%) also stood out among the Dow components.

Market breadth was relatively balanced, with advancers and decliners finishing nearly even on both the NYSE and Nasdaq. Even so, the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.6%) both posted respectable gains, suggesting the broader market continued to participate despite the renewed leadership from mega-cap technology.

Elsewhere, the real estate sector (-2.2%) finished lower for a second consecutive session, pressured by a sharp decline in Digital Realty Trust (DLR 179.58, -11.00, -5.77%) following its announced data center acquisition.

The defensive consumer staples (-1.5%), utilities (-1.5%), and health care (-1.3%) sectors also lagged as investors favored growth-oriented areas of the market.

The energy sector (-0.8%) finished lower as crude oil prices eased while investors continued monitoring developments surrounding the latest round of U.S.-Iran negotiations.

Overall, today's session reinforced that mega-cap technology has reclaimed market leadership after briefly taking a back seat last week. At the same time, respectable gains across small- and mid-cap stocks suggest the recent improvement in market participation remains intact, allowing the major averages to recover nearly all of last week's decline without a meaningful deterioration in underlying breadth.

U.S. Treasuries retreated on Tuesday, with yields finishing June and Q2 just above last week's lows. The 2-year note yield settled up three basis points to 4.14%, adn the 10-year note yield settled up four basis points to 4.42%.

• Russell 2000: +21.9% YTD
• S&P Mid Cap 400: +16.6% YTD
• Nasdaq Composite: +12.8% YTD
• S&P 500: +9.6% YTD
• DJIA: +8.9% YTD

Reviewing today's data:

• April FHFA Housing Price Index -0.1% (Briefing.com consensus 0.2%); Prior was revised to 0.2% from 0.1%
• April S&P Case-Shiller Home Price Index 1.1% (Briefing.com consensus 0.9%); Prior was revised to 0.9% from 0.8%
• June Chicago PMI 56.7 (Briefing.com consensus 60.0); Prior 62.7
• June Consumer Confidence 91.2 (Briefing.com consensus 94.2); Prior was revised to 90.6 from 93.1
  • The key takeaway from the report is that the June increase followed a downward revision to May's reading, so there is some persistent caution in confidence as the expectations index remains below a level that has traditionally signaled an upcoming recession.
• May JOLTS - Job Opening 7.594 mln; Prior was revised to 7.585 mln from 7.618 mln