Key Highlights

The S&P 500 rose 0.8% and the Nasdaq 100 gained 1.7% on Tuesday, as technology shares led broad-based gains across the US equity market. The rally came amid easing inflation risk and continued strength across the semiconductor sector, which has rebounded after a period of valuation-driven caution among investors.

Chipmakers were the standout performers of the session, with Nvidia, AMD, and Intel posting gains of 2.6%, 7.7%, and 6.0% respectively. The moves reflected renewed investor confidence following strong forward guidance from semiconductor producers, which helped ease concerns that valuations across AI-related stocks had become stretched relative to near-term earnings visibility.

Beyond the chip sector, broader technology names also participated in Tuesday's rally, contributing to the Nasdaq 100's outperformance relative to the S&P 500. This breadth suggests the session's gains were not confined to a narrow segment of the market but reflected a more general improvement in sentiment toward growth-oriented technology stocks.

Easing inflation risk played a significant supporting role in Tuesday's session. Oil prices remained near pre-conflict levels, helping calm fears that the Federal Reserve could be forced into a renewed hiking cycle to contain price pressures. This steadier backdrop provided a tailwind for risk assets across the board, supporting gains in both growth and more traditional, value-oriented sectors of the market.

The session's strength also fits within a broader pattern of robust performance for US equities through the second quarter, with the S&P 500 and Nasdaq 100 both on track for their strongest quarterly performances since the second quarter of 2020. This sustained rally has been underpinned by a combination of resilient corporate earnings, continued AI infrastructure investment, and a gradually improving inflation outlook.

Investors will likely continue to monitor upcoming corporate earnings reports and inflation data for further confirmation of whether the conditions supporting Tuesday's gains can be sustained into the second half of the year.