US stocks moved in different directions on Tuesday as strong corporate results lifted the Dow Jones Industrial Average, while another sharp decline in semiconductor shares weighed on the NASDAQ Composite. The S&P 500 also traded lower as investors reduced exposure to technology stocks.
The Dow gained about 400 points, or 0.8%, during morning trading. Meanwhile, the NASDAQ fell more than 1%, and the S&P 500 slipped around 0.3%. The split showed investors moving toward health care, financials, consumer staples and other established sectors.
Trading volume increased in several chip names as the decline spread from memory producers to equipment makers. Advancing shares still outnumbered falling shares on the New York Stock Exchange, showing that the sell-off stayed concentrated in technology rather than the entire market.
Sherwin-Williams led the Dow after its second-quarter results exceeded market estimates. Its shares climbed about 8%, giving the price-weighted index a strong boost. Coca-Cola gained more than 6% after reporting better earnings and raising its annual revenue and profit forecasts.
Boeing also advanced after the aircraft maker reported positive free cash flow and progress in its turnaround plan. These gains helped offset weakness elsewhere and supported broader demand for companies with established revenue streams and clearer near-term earnings.
Semiconductor shares faced another heavy round of selling. Micron fell sharply, while Intel, Arm Holdings and Teradyne also recorded steep losses. The VanEck Semiconductor ETF dropped about 5%, and the Philadelphia Semiconductor Index moved further below its June record.
Investors have questioned whether large spending plans for artificial intelligence infrastructure will produce enough returns. Concerns about cheaper Chinese technology and rising chip supply have added pressure. “The market is extremely concerned about the level of spending” by major technology companies, Robert Pavlik of Dakota Wealth said.
Health care and financial shares reached fresh intraday records as money moved away from high-growth technology names. The Health Care Select Sector SPDR Fund rose more than 2%, while the Financial Select Sector SPDR Fund also traded higher.
Consumer staples gained support from Coca-Cola’s rally. In contrast, information technology ranked as the weakest S&P 500 sector. The NASDAQ 100 also entered correction territory, trading about 10% below its intraday record as semiconductor losses continued to pressure the index.
The Federal Reserve will announce its rate decision on Wednesday. Markets expect officials to keep rates unchanged, although traders are watching for guidance on possible increases later this year. ING’s Padhraic Garvey said, “Our call is for no change,” citing calmer inflation expectations and the shape of the Treasury yield curve.
Investors will also review earnings from Amazon, Meta Platforms, Microsoft and Apple. Their spending plans will receive close attention after doubts grew around the cost and returns of AI investment. Results from these companies could influence chipmakers that depend on continued spending by large cloud providers.
Oil prices extended Monday’s losses as Iran held talks with Saudi Arabia and Oman over reopening shipping routes near the Strait of Hormuz. Brent crude fell about 2%, while West Texas Intermediate also declined as markets tracked the pause in regional hostilities.
Lower crude prices offered some relief after the recent energy surge raised inflation concerns. However, shipping through the Strait remained limited, and traders continued to monitor diplomatic talks. Equity markets also watched long-term Treasury yields, which stayed elevated and kept borrowing costs high for households and weaker companies.