Dow rises 116 as chip stocks push markets to H1 gains

U.S. stocks closed higher Tuesday as semiconductor shares led gains on the final trading day of the second quarter and the first half of 2026. The Dow Jones Industrial Average rose 116.17 points to 52,298.91.

The S&P 500 gained 0.75% to 7,498.38 and the Nasdaq Composite climbed 1.45% to 26,194.76. Nvidia advanced just over 1%, while Advanced Micro Devices and Intel each rose about 7%. The VanEck Semiconductor ETF (SMH) increased 3% on the day and has gained more than 81% in the first half of 2026, reflecting investor demand tied to artificial intelligence infrastructure spending.

For the first six months, the Dow is up more than 8%, its best opening half since 2021. The S&P 500 also rose more than 8% and the Nasdaq gained over 11% in the period. Small caps led on a percentage basis: the Russell 2000 climbed more than 21%, its strongest start to a year since 1991. In the second quarter, the S&P 500 increased roughly 14%, the Nasdaq about 20% and the Dow more than 12%—their largest quarterly rises in several years.

Markets navigated stretches of volatility in the first half as investors weighed geopolitical tensions and questions about the sustainability of AI spending. Sentiment improved during the quarter as concerns around AI investment eased and hopes grew that diplomatic efforts involving Iran could reduce regional risks. Exchanges of fire over the weekend nevertheless highlighted ongoing tensions.

Traders continue to watch monetary policy expectations. Market pricing shows at least one Federal Reserve interest-rate increase is likely before the end of 2026, according to LSEG data. Investors are also shifting focus to second-quarter corporate earnings after a strong first quarter for many S&P 500 companies.

Some market strategists expect market leadership to broaden in the second half of the year. Bank of America strategists pointed to cyclical and value-oriented sectors, including energy and financials, as potential areas of opportunity if gains spread beyond technology and AI-related stocks. The heavy chip-stock gains in the first half underscore the link between the market rally and AI-related investment, even as smaller and cyclical stocks also posted meaningful advances.