Closing Bell: Chip Rally Lifts Nasdaq as Yields, Oil Retreat

U.S. stocks closed modestly higher Tuesday as Treasury yields declined for a second straight session and oil prices slid sharply, helping support risk appetite.

The S&P 500 (SPX) rose 0.32%, and the Dow Jones Industrial Average ($SJI) added 0.3%. The small-cap Russell 2000 (RUT) climbed 0.5%, while the tech-heavy Nasdaq-100 (NDX) gained 0.64% with semiconductor stocks leading the advance.

U.S. crude oil prices provided a tailwind for equities, with a decline of more than 4% to near $81 per barrel. The move followed the U.S. government's emphasis on economic sanctions for Iran rather than military action. Oil has fallen more than 6% this week despite a new round of U.S. sanctions targeting Iran and entities that conduct business with the country.

Three Things to Watch from Tuesday's Market

Treasury Yields Extend Pullback 

The benchmark 10-year Treasury yield fell for a second consecutive session and finished near 4.64%. The decline followed reports that the U.S. Treasury Department could tap its roughly $1 trillion General Account to fund bond repurchases, a development that investors viewed as supportive for fixed-income markets. Lower yields often provide support for equity valuations, particularly among technology and other growth-focused sectors. See Ben Emons on U.S. Tariff Tensions, Treasury Doubling Liquidity & Midterms

Semiconductors Lead Technology Higher 

Chip stocks powered the Nasdaq-100's outperformance Tuesday, helping lift the technology sector. Shares of Nvidia (NVDA) rose 2% ahead of its highly anticipated earnings report Wednesday after the closing bell. Semiconductor strength came as investors rotated into growth-oriented names. Intuit (INTU), however, projected a lower rate of growth this year, and its shares sank 10.25%. Super Micro Computer (MRNA) rose 10%, the second-best performance in the S&P 500. The strongest one-day return in the S&P was Moderna (MRNA), which surged more than 14% following positive trial results for its personalized mRNA cancer vaccine, according to reports. See Software: What Options Markets are Saying About Intuit (INTU) Earnings

Dick's Sporting Goods Suffers Record Drop 

Dick's Sporting Goods (DKS) plunged more than 30%, its worst trading day on record. The company reported results that missed analyst estimates and cut its full-year outlook. The weakness weighed on other retailers, with Walmart (WMT) falling roughly 1% and Target (TGT) declining 3.8%. See DKS Fumbles: Double Miss & Lowered Guidance Plunges Stock Over 25%  

Markets are geared up to hear from Federal Reserve Chairman Kevin Warsh Friday at the Fed's meeting in Jackson Hole, Wyoming.  For economic and earnings calendars for the week, see Schwab Network's Sunday Week Ahead article.

Tom White contributed to this article

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