Traders work during the DPC Holdings Ltd. initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, US, on Thursday, June 25, 2026.

Michael Nagle | Bloomberg | Getty Images

Stocks rose on Tuesday, boosted by sharp gains in chips, as Wall Street set out to wrap up a strong first half and second quarter. Traders also monitored oil prices amid uncertainty surrounding the conflict in the Middle East.

The Dow Jones Industrial Average traded up 129 points, or 0.3%. The S&P 500 and Nasdaq Composite were up 0.7% and 1.3%, respectively.

The moves higher were supported by a rise in chip stocks. Shares of Nvidia gained more than 1%, while Advanced Micro Devices added 3%. Intel shares popped 4%. The VanEck Semiconductor ETF (SMH) climbed 3%, putting its year-to-date gain at more than 81%.

Oil prices were little changed, however. U.S. West Texas Intermediate futures were last at almost $70 a barrel, while international benchmark Brent crude futures were trading at roughly $73 a barrel.

Stocks rallied in Monday's session, as a pause in hostilities between the U.S. and Iran lifted sentiment, as the U.S. and Iran on Sunday agreed to halt their attacks and allow commercial vessels to pass through the key Strait of Hormuz waterway. A U.S. official told CNBC on Sunday that "both sides will stand down for now and vessels can move freely."

Tuesday marks the final day of the first half and the second quarter.

The Dow has climbed more than 8% in the first six months of the year, putting it on pace for its best first-half performance since 2021, when it jumped 12.7%. The S&P 500 is also up more than 8% in the first half, while the Nasdaq has outperformed with a more than 11% advance. Additionally, the Russell 2000 has gained more than 21%, heading for its best first half since the first six months of 1991.

The start of the year was characterized by volatility. While the major averages hit all-time highs, they did so in spite of wild swings in energy prices due to the Iran war as well as uncertainty around the sustainability of AI spending.

"For me the lesson of the first half of 2026 is that earnings matter more than just about anything, except for maybe interest rates," said Tim Holland, chief investment officer at Orion.

The second quarter of the year, however, has been especially strong for stocks, as fears around the AI trade eased and the war appeared to near a resolution.

The S&P 500 and Nasdaq has risen about 14% and 20%, respectively, for Q2, on pace for their biggest quarterly gain since the second quarter of 2020. The Dow has gained more than 12% in that time, headed for its strongest quarter since Q4 2022.

Barring an increase in hostilities between the U.S. and Iran, Holland expects the bull market to continue to broaden for the rest of the year, with investors moving more into cheaper areas of the market.

"The world continues to focus on the AI capex build out and AI trade, and I think rightly so, but if you look under the hood of the market, what's been working year to date, and at least for the month of June as well is value stocks as opposed to growth stocks," he added. "Interest rates are probably going to be a little elevated, which tends to be a headwind for higher price growth stocks, but tends to be a tailwind for economically sensitive stocks and the like."