Chip Stocks Lift NASDAQ as Middle East Fighting Pushes Oil Prices Higher

US stock markets moved into positive territory on Tuesday, 21 July 2026, as a rebound in the semiconductor sector helped the NASDAQ Composite offset lingering anxieties regarding geopolitical instability and energy security. The broader rally saw the S&P 500 and the Dow Jones Industrial Average also advance, even as investors grappled with military developments in the Middle East and the looming expiration of existing trade tariffs.

The semiconductor recovery served as the primary catalyst for the tech-heavy NASDAQ, which gained approximately 0.8% in morning trading. The Philadelphia Semiconductor Index surged 3.7%, extending its gains for a second consecutive session. Major industry players saw significant activity, with Micron Technology climbing 8% and Intel rising more than 6%. Additional gains were recorded by Marvell Technology, Astera Labs, SanDisk, and Western Digital, signaling a return of buyer interest to memory-chip stocks following recent volatility.

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While technology shares provided a tailwind, energy markets remained under pressure due to escalating conflict. Brent crude rose approximately 2% to trade above $91 a barrel, while West Texas Intermediate climbed past $85. The upward pressure on oil followed renewed military action involving the United States and Iran, including overnight strikes and reports of a maritime embargo targeting Saudi Arabia, which intensified concerns regarding regional shipping and energy infrastructure. US Central Command carried out overnight strikes, while Iranian forces targeted American military assets. Markets monitored a reported 10-day ceasefire proposal between the United States and Iran, a diplomatic effort that limited part of the oil price advance.

The global economic climate remained complex as markets processed conflicting signals. In Europe, the Stoxx 600 index closed 0.6% higher, marking a break from a two-day losing streak, as strength in mining and technology shares counterbalanced the surge in oil prices. Conversely, markets in India saw downward pressure; the BSE Sensex declined 238.41 points to settle at 77,470.11 on Tuesday, 21 July 2026, driven by disappointing quarterly results from HDFC Bank and broader risk-off sentiment tied to the Middle East crisis.

Corporate earnings provided a focal point for investors. According to data from FactSet, 88% of S&P 500 companies that have reported results thus far have beaten profit expectations. 3M shares jumped more than 9% following its report, and General Motors rose about 3% after exceeding estimates.

"The next two weeks will be a defining stretch for earnings, and not just for tech. Companies missing Wall Street’s high expectations face stronger selling pressure than they did during the previous quarter."

Bret Kenwell, eToro analyst

Financial sector performance remained in the spotlight as KeyCorp reported a 26% year-over-year increase in earnings per share. Despite broader macroeconomic uncertainty, the bank cited strong commercial loan growth and expansion in its net interest margin as key drivers for its positive guidance for the remainder of the year. KeyCorp raised its full-year outlook, now expecting revenue to grow 7% to 8% and average commercial loans to increase 8% to 10%.

The broader market outlook continues to be shaped by fiscal and geopolitical policy developments. Investors are monitoring potential new trade measures after the administration announced a 50% tariff on a range of Canadian imports. With a 10% global tariff set to expire this coming Friday, market participants are bracing for further announcements from the White House that could impact dozens of countries.

Not all sectors participated in the day's recovery. Danaher shares fell 13% after the company lowered its annual core revenue growth forecast, and MSCI dropped 11% following an increase in its operating expense guidance. Analysts at Morgan Stanley also reduced price targets on several software firms, including Adobe, Intuit, Workday, and Salesforce, reflecting ongoing concerns regarding the sustainability of current tech valuations.

What to Watch Next

• Earnings Releases: Market attention shifts toward upcoming results from Alphabet, Tesla, IBM, and Intel later this week.
• Central Bank Policy: European Central Bank policymakers are expected to hold interest rates steady during their upcoming meeting on Thursday.
• Geopolitical Developments: Traders remain sensitive to any further updates regarding a reported 10-day ceasefire proposal between the United States and Iran.
• Trade Policy: The potential expiration of the current 10% global tariff on Friday remains a critical point of uncertainty for global trade participants.