U.S. stocks climbed Tuesday, snapping a three-day losing streak, as a powerful rally in semiconductor stocks helped investors look past a further escalation in the U.S.-Iran war and turn their attention toward corporate earnings season instead.

The Numbers

The Dow Jones Industrial Average gained 385.38 points, or 0.74%, to close at 52,224.64. The S&P 500 rose 0.89% to 7,509.20, and the Nasdaq Composite jumped 1.29% to finish at 25,837.21.

Chips Led the Rally

Semiconductor stocks provided the clearest boost to the broader market. The VanEck Semiconductor ETF (SMH) gained more than 4%. Marvell Technology jumped more than 6%, Astera Labs added 3%, Micron Technology advanced 12%, and Intel climbed 8% — a sharp rebound after the sector had shed significant value in the prior session amid escalating war headlines.

The War Backdrop

Tuesday's gains came despite an intensifying conflict. U.S. Central Command carried out its 10th consecutive night of strikes on Iran since President Trump declared the ceasefire "over," while Iranian forces struck U.S. military assets across the Middle East and Iran's Houthi allies declared a maritime embargo against Saudi Arabia. Oil prices seesawed throughout the session as traders monitored a renewed diplomatic push, with reports suggesting mediators had proposed a 10-day ceasefire between the two sides. Crude had traded higher Monday after Trump said in a Truth Social post that Tehran would "pay" for the deaths of three U.S. service members — a move that had pulled major averages lower even as chip stocks clawed back some of the prior week's steep losses.

Why the Market Shrugged Off the War Headlines

Investors appear to be treating the conflict as containable rather than systemically threatening to markets, at least for now. Sam Stovall, chief investment strategist at CFRA Research, said investors are largely waiting to see how earnings season shakes out before making major portfolio moves. Earnings growth expectations have continued climbing since the start of the second-quarter reporting season, up to 25%, according to FactSet data — a strong underlying profit picture that's giving investors reason to stay engaged with equities even amid the geopolitical noise.

Supporting Economic Data

Tuesday's session also benefited from encouraging domestic data. Robust employment figures supported investor sentiment, with initial jobless claims for the prior week coming in at 215,000, below market expectations. Existing home sales, meanwhile, fell 2.4% from the previous month, reflecting some ongoing contraction tied to elevated interest rates — a reminder that not every corner of the economy is moving in the same direction even as headline job and inflation data have trended favorably.

SK Hynix's Nasdaq Debut Adds to Chip Sector Momentum

The broader memory chip trade got an additional boost from SK Hynix's blockbuster Nasdaq debut, with its U.S. ADR offering priced at $149 per share and demand exceeding the offering size by more than seven times. Forecasts that the industry's high-bandwidth memory (HBM) supply shortage will persist until 2027 added further fuel to the rally, benefiting Micron in particular, which has separately announced large-scale U.S. investment plans tied to the same AI-driven memory demand story.

What's Next

With Central Command's strikes on Iran continuing nightly and reports of a potential 10-day ceasefire proposal still unconfirmed, investors are likely to keep weighing geopolitical headlines against the strengthening earnings backdrop. For now, Tuesday's session suggests that as long as corporate profit growth continues outpacing expectations and chip demand stays robust, Wall Street remains willing to look past even a rapidly escalating Middle East conflict — though that calculus could shift quickly if oil prices or diplomatic efforts take a turn.