US stocks edged higher on Tuesday but the advance stayed selective as investors balanced strong earnings, fresh AI optimism, and renewed uncertainty around the Middle East. 

The Dow Jones Industrial Average rose about 0.6% in morning trading while the S&P 500 added roughly 0.2% and the Nasdaq Composite gained about 0.1%. The move kept the benchmark near record territory after the S&P 500 closed above 7,000 for the first time last week.

Market momentum stayed concentrated in a limited group of stocks which reinforced the view that investors still showed caution even as indexes held near highs. That tone appeared in trading activity, investor positioning and the narrow group of names driving the latest leg higher.

 J.P. Morgan added to the bullish backdrop on Tuesday by raising its year-end S&P 500 target to 7,600 from 7,200, citing stronger earnings and AI-led growth.

AI trades and earnings keep indexes in positive territory

Technology and AI-linked developments helped support sentiment early in the session. Amazon rose about 2% after announcing plans to invest up to $25 billion in Anthropic, extending its push into AI infrastructure and cloud demand. That gain helped lift the S&P 500 consumer discretionary sector by nearly 1%, making it the strongest performer among the major groups.

Quarterly earnings also continued to support risk appetite. LSEG data showed that 87.5% of the 48 S&P 500 companies that had reported results through last Friday beat analysts’ expectations, well above the long-term average of 67.4%. 

Thomas Hayes, chairman at Great Hill Capital, said strong results were overpowering broader concerns, a sign that earnings remained central to market direction.

S&P 500 forecast rises as Wall Street watches leadership breadth

J.P. Morgan’s revised target gave investors another reason to stay engaged in equities. The bank now expects the S&P 500 to end 2026 at 7,600 and raised its earnings-per-share forecast for 2026 to $330 from $315. The move followed the index’s sharp rebound from its late-March low and reflected confidence that AI spending and technology profits can keep supporting valuations.

Even so, the structure of the rally remained a key issue. Recent market commentary pointed to low volumes, muted sentiment, and a small group of stocks carrying much of the advance. That pattern suggested investors had not fully embraced the rally, even as headline indexes pushed to new highs.

For the US stock market the main signal was clear: prices moved up, but conviction remained uneven.

UnitedHealth jumps while Apple and GE Aerospace weigh on breadth

Individual company moves showed how uneven the session remained. For instance, UnitedHealth jumped 9.2% after raising its full-year profit outlook and topping first-quarter expectations. CVS Health also rose 1.7% and Humana gained 5.2% though the larger healthcare sector still slipped about 0.5%, limiting gains in the S&P 500.

Apple fell about 0.5% after confirming that Tim Cook would hand the CEO role to hardware chief John Ternus while Cook becomes executive chairman. 

Aerospace dropped 3.1% after warning about a tougher backdrop marked by high oil prices, fuel constraints, and slower global growth. 

Alaska Air also lost ground after withdrawing its full-year profit forecast.

Retail sales and Fed politics add another layer for investors

Fresh economic data showed that U.S. retail and food services sales rose 1.7% in March to $752.1 billion. It beat expectations and suggests consumer activity remained firm. Sales were up 4.0% from a year earlier, offering another sign that spending held up despite geopolitical tension and higher fuel costs. That data added support to the view that the economy remained resilient.

At the same time investors kept watch on Washington. Kevin Warsh, President Donald Trump’s nominee to lead the Federal Reserve, faced a Senate confirmation hearing as political pressure around current Fed Chair Jerome Powell intensified. 

The hearing carried added importance because any signal on rates, Fed independence, or leadership transition could influence the next move in stocks, bonds, and the broader U.S. market.

Also Read: US Stock Market Today: Wall Street Slips From Record Highs as Renewed US-Iran Tensions Weigh