Semiconductor Surge Sends S&P 500 to Fresh Record Highs

Stocks kicked off the holiday-shortened week with another push higher, as renewed momentum in semiconductor and AI-related names powered the market to fresh highs. The S&P 500 gained 0.6% to close at another record level, while the Nasdaq Composite advanced 1.2%. The Dow Jones Industrial Average lagged with a modest 0.2% decline, reflecting mixed participation beneath the surface.

Technology once again led the market, fueled by a powerful rally across chipmakers. The PHLX Semiconductor Index surged 5.5%, helping the information technology sector finish as the best-performing S&P 500 sector with a 1.7% gain.

The standout move came from Micron Technology, which exploded nearly 20% higher after UBS dramatically raised its price target and reiterated its bullish outlook on the company. The rally briefly pushed Micron’s valuation above the $1 trillion mark, underscoring the extraordinary investor enthusiasm surrounding AI-driven memory demand.

Other semiconductor names also posted outsized gains. Advanced Micro Devices rallied sharply, while onsemi joined the advance as investors continued rotating aggressively into AI infrastructure and chip-related plays.

Meanwhile, NVIDIA remained relatively subdued following last week’s earnings release. Despite intraday attempts to rally, shares struggled to sustain upward momentum, suggesting some investors may still be digesting the stock’s enormous run over recent months.

The broader market also benefited from an improving macro backdrop. Oil prices and Treasury yields both moved lower after reports indicated the U.S. and Iran made incremental progress during negotiations over the weekend.

Crude oil futures settled down 3.0% at $93.89 per barrel, while the 10-year Treasury yield declined seven basis points to 4.49%. The retreat in both oil and yields provided relief for economically sensitive and rate-sensitive areas of the market.

The industrials sector climbed 1.5%, helped by strong gains in airline stocks such as United Airlines as lower fuel costs improved sentiment across the group.

The materials sector also outperformed, with construction and infrastructure-related names benefiting from the decline in yields. Martin Marietta Materials was among the sector’s top gainers.

Elsewhere, the communication services sector rose 0.9% as Alphabet rebounded from recent weakness and helped stabilize sentiment across mega-cap growth stocks.

Small-cap and mid-cap stocks also turned in an impressive showing. The Russell 2000 advanced 1.8%, while the S&P Mid Cap 400 gained 1.5%, reflecting improved appetite for more cyclical and economically sensitive areas as yields retreated.

Not all sectors participated in the rally, however. The energy sector dropped 2.8% alongside falling oil prices, making it the day’s weakest performer.

Defensive groups also lagged as investors favored higher-beta growth and cyclical exposure. The consumer staples sector fell 1.7%, while the health care sector declined 1.0%.

Within consumer discretionary, AutoZone posted one of the sharpest losses in the S&P 500 after a mixed earnings report revealed continued margin pressure tied to inflation-related accounting impacts. Still, the consumer discretionary sector managed to finish slightly positive thanks to strength in Tesla and cruise line stocks, which benefited from lower energy prices.

Overall, Tuesday’s session reinforced the market’s continued preference for semiconductor and AI-driven leadership while highlighting improving participation across cyclical sectors as macro pressures eased. Falling oil prices and lower Treasury yields added another supportive layer to the rally, helping extend the broader market’s upward momentum as the S&P 500 continued deeper into record territory.

Our FTinvest 11 model portfolio surged 1.28% to close at 1,049.54, setting a new all-time high and surpassing the previous record of 1,041.22. The strong advance extends the portfolio’s impressive rebound from the mid-May pullback and confirms renewed upward momentum heading into the final week of the month.

FTinvest 11 is now up approximately +13.08% year-to-date, reinforcing its strong performance in 2026. Reaching a fresh record high highlights the resilience of the portfolio and the continued effectiveness of its disciplined, value-driven investment strategy amid evolving market conditions.