Semiconductor Surge Caps Strong Quarter as Stocks Finish June on a High Note

Stocks closed the second quarter with another impressive advance as continued strength in semiconductor shares lifted the major averages higher. The S&P 500 gained 0.8%, the Nasdaq Composite climbed 1.5%, and the Dow Jones Industrial Average added 0.3%, with the Dow registering yet another record closing high. The session capped the strongest first half of the year for the Dow since 2021, while the S&P 500 and Nasdaq posted their best quarterly performances since 2020. Both indexes have also recovered nearly all of last week’s pullback.

Semiconductor stocks remained the market’s clear leadership group. The Philadelphia Semiconductor Index rallied 3.9%, extending Monday’s powerful rebound as investors continued adding exposure to AI-related chipmakers. Advanced Micro Devices gained 7.7%, Intel advanced 6.0%, and Sandisk surged 10.9% to lead memory stocks higher. The broad-based strength pushed the information technology sector up 2.6% and further reinforced the return of mega-cap technology leadership that began earlier this week.

Leadership within technology extended beyond semiconductors, although gains were more selective across the sector. The Vanguard Mega Cap Growth ETF rose another 1.7%, with Apple climbing 2.7% and Microsoft adding 1.2% as both companies continued to build on Monday’s gains.

Performance outside the technology sector was more mixed. Consumer discretionary stocks finished little changed, as Tesla’s 2.1% gain offset weakness across several other retail and consumer names. Communication services also closed essentially flat despite another positive session for Alphabet.

The sector’s performance continued to be held back by weakness among broadband and wireless providers. Verizon and AT&T extended their recent declines as investors continued evaluating the competitive implications of Comcast’s restructuring announcement earlier this week.

Industrials emerged as one of the day’s strongest performers, gaining 1.4%. Electrical equipment manufacturers continued to benefit from their close ties to AI infrastructure spending, while Caterpillar delivered another solid advance to rank among the Dow’s top-performing components.

Despite renewed leadership from mega-cap technology, underlying market participation remained encouraging. Advancing and declining stocks finished nearly evenly on both the NYSE and Nasdaq, while the Russell 2000 rose 0.5% and the S&P MidCap 400 gained 0.6%. Those results suggest investors continued to support a broad range of stocks even as capital flowed back into the market’s largest growth companies.

Real estate was the weakest-performing sector for a second consecutive session, falling 2.2%. Digital Realty Trust weighed heavily on the group after declining 5.8% following its announcement of a major data center acquisition.

Defensive sectors also lagged as investors favored higher-growth opportunities. Consumer staples and utilities each fell 1.5%, while health care declined 1.3%.

The energy sector slipped 0.8% as crude oil prices eased while investors continued monitoring developments surrounding the latest round of U.S.-Iran negotiations.

Tuesday’s session provided a fitting conclusion to an exceptionally strong quarter. Mega-cap technology and semiconductor stocks have firmly reestablished themselves as market leaders after briefly giving way to broader participation last week. At the same time, respectable gains across small- and mid-cap stocks suggest that market breadth remains healthy, allowing the major averages to recover nearly all of last week’s losses without any meaningful deterioration beneath the surface. That combination of renewed technology leadership and resilient participation across the broader market provides a constructive backdrop as investors head into the third quarter.

Our FTinvest 11 model portfolio rebounded 1.40% to close at 982.48, recovering most of the previous session’s losses and climbing back after briefly entering correction territory. While the portfolio remains below the 1,000 level, today’s advance reduced the drawdown from its all-time high of 1,078.93 to approximately 8.9%, moving the index back out of correction territory.

FTinvest 11 is now up approximately +5.85% year-to-date, finishing the first half of 2026 with a solid positive return despite elevated volatility throughout June. The month’s sharp swings—driven largely by company-specific developments in one portfolio component—demonstrated both the risks and opportunities inherent in active value investing. Although recent market conditions have been challenging, FTInvest 11 continues to adhere to its disciplined, long-term investment philosophy, focusing on fundamental value rather than short-term market sentiment.