Wall Street's major indexes advanced during Tuesday's session, supported by a rebound in semiconductor stocks that shifted investors' focus away from developments in the Middle East conflict and toward the corporate earnings season, with results from major technology companies expected to provide fresh clues on the outlook for artificial intelligence spending.

The gains came as US forces launched fresh strikes on southern and western Iran in response to the killing of American soldiers, while a senior Iranian official said Tehran had received a proposal from mediators for a 10-day ceasefire.

Meanwhile, Brent crude climbed above $90 a barrel following the military strikes.

Chip stocks lead market gains

The semiconductor sector led the rally, with the Philadelphia Semiconductor Index rising 3.7% to post its second consecutive session of gains.

Although the index ended last Friday more than 20% below its record high reached in late June, confirming its entry into a bear market, it remains up about 72% since the start of the year.

Shares of SanDisk, Western Digital, and Micron Technology jumped between 7.7% and 10.2%.

Chipmakers have come under heavy pressure in recent weeks as investors questioned whether the sector's rally had become overextended and scrutinized the returns generated by the massive AI infrastructure spending of major technology companies.

Among the SP 500 sectors, information technology led the gains with a 1.3% advance.

Art Hogan, chief market strategist at B. Riley Wealth Management, said investors are trying to balance strong corporate earnings against the ongoing military developments involving Iran. He added that markets are looking for reassurance from major technology companies, particularly Alphabet, that capital spending plans remain intact, which could help limit the recent correction in semiconductor stocks.

Indexes and stocks

As of 9:57 a.m. Eastern Time:

The Dow Jones Industrial Average rose 171.34 points, or 0.33%, to 52,010.60.

The SP 500 gained 30.20 points, or 0.41%, to 7,473.48.

The Nasdaq Composite advanced 172.68 points, or 0.68%, to 25,680.75.

Investors are awaiting earnings this week from Alphabet and Intel, which could determine whether the AI-driven rally still has enough momentum to continue amid elevated profit expectations.

Tariffs add to market uncertainty

US President Donald Trump added to market uncertainty after announcing a 50% tariff on a broad range of Canadian imports.

The Financial Times also reported that Trump is preparing to impose new tariffs on dozens of countries later this week before the current 10% global tariff expires on Friday.

Notable stock movers

3M surged 9.5% after the company raised its full-year profit forecast.

Danaher fell 13% after lowering its outlook for core revenue growth and reporting weaker-than-expected revenue from its biotechnology business.

MSCI declined 11% after raising its full-year operating expense forecast despite reporting quarterly revenue that exceeded expectations.

Software stocks also came under pressure after a financial institution lowered its price targets on several companies. Adobe, Intuit, Workday, and Salesforce fell between 1.5% and 2.6%.

Market breadth was positive, with advancing stocks outnumbering decliners by a ratio of 1.19 to 1 on the New York Stock Exchange and 1.47 to 1 on the Nasdaq.

The SP 500 recorded five new 52-week highs and five new lows, while the Nasdaq Composite posted 22 new highs and 64 new lows.