US stocks closed higher on Tuesday as gains in semiconductor shares helped Wall Street wrap up a strong first half of 2026 and one of its best quarterly performances in years, despite lingering geopolitical and interest rate concerns.
The Dow Jones Industrial Average rose 116.17 points, or 0.22%, to close at 52,298.91.
The S&P 500 gained 0.75% to 7,498.38, while the Nasdaq Composite climbed 1.45% to 26,194.76.
Technology stocks led the market higher, with semiconductor companies extending their recent rally.
Nvidia gained more than 1%, while Advanced Micro Devices and Intel each advanced about 7%.
The VanEck Semiconductor ETF (SMH) rose 3% on the day, bringing its gain for the first six months of 2026 to more than 81%, reflecting continued investor optimism around artificial intelligence infrastructure spending.
Wall Street caps off a strong first half
Tuesday marked the final trading day of both the first half of the year and the second quarter.
The Dow finished the first six months of 2026 up more than 8%, making its strongest first-half performance since 2021.
The S&P 500 also gained more than 8% during the period, while the Nasdaq outperformed with an advance of more than 11%.
Small-cap stocks also posted notable gains. The Russell 2000 climbed more than 21% during the first half, marking its strongest start to a year since 1991.
The second quarter proved particularly strong for equities.
The S&P 500 rose about 14% during the quarter, while the Nasdaq surged roughly 20%, making it the largest quarterly gains since the second quarter of 2020 for both the indices.
The Dow gained more than 12% during the quarter, its best performance since the fourth quarter of 2022.
Earnings and AI continue to drive sentiment
Markets navigated significant volatility during the first half as investors balanced record highs against concerns surrounding the Iran conflict and questions about the sustainability of artificial intelligence spending.
Investor sentiment improved during the second quarter as concerns surrounding AI spending eased and optimism grew that the conflict involving Iran was moving toward a lasting resolution.
Optimism surrounding US Iran diplomatic efforts helped support equities, even as exchanges of fire over the weekend highlighted continuing tensions.
Investors are now turning their attention to second-quarter earnings season after a strong first quarter for S&P 500 companies.
Investors look beyond technology
While artificial intelligence remains a dominant investment theme, some market strategists expect leadership to broaden during the second half of the year.
Bank of America strategists pointed to cyclical and value-oriented sectors, including energy and financials, as potential opportunities heading into the second half of the year.
Meanwhile, investors continue to monitor monetary policy expectations, with traders pricing in at least one Federal Reserve interest rate hike before the end of 2026, according to LSEG data.
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