US stocks recovered on Tuesday as investors assessed a busy earnings schedule, falling oil prices and continued concerns around artificial intelligence investment, with chip stocks remaining under pressure despite broader market gains.
The S&P 500 rose nearly 0.4%, while the Dow Jones Industrial Average climbed 1.2% as investors responded to a series of corporate results. The Nasdaq Composite recovered from earlier losses to trade close to flat as weakness across semiconductor shares limited gains.
Technology stocks remained in focus after concerns increased around potential circular financing arrangements involving major AI companies.
Nvidia shares faced renewed pressure following reports that the company is exploring a $250 billion funding backstop for OpenAI, further linking the two companies and raising questions among investors over how AI investments are being financed.
The chip sector also came under pressure from concerns that Chinese companies are narrowing the gap with US technology firms in artificial intelligence, potentially affecting expectations around future returns from large-scale AI spending.
Despite weakness in parts of technology, earnings provided support across the wider market. Boeing, PayPal and Coca-Cola all moved higher after reporting quarterly results, with Coca-Cola shares on track for their strongest daily performance since 2009.
Oil prices extended their recent decline after the US and Iran halted active fighting and President Donald Trump said both sides were engaged in diplomatic discussions. The move lower in crude prices helped ease some pressure on markets following recent concerns over energy costs.
SpaceX shares attempted to recover after hitting a record low on Monday following a successful Starship rocket test. The stock initially fell 4% on Tuesday before recovering by midday, closing Monday at $113.50 after reaching an all-time low of $109.53.
Shares remain down almost 30% from their $150 market debut last month and around 50% below their record high of $225.64. Investors are now looking ahead to the company’s second-quarter earnings on 4 August and a major share unlock on 6 August, when up to 20% of shares could become eligible for sale.
In London, stocks moved higher as strong results from consumer, healthcare and industrial companies lifted sentiment. The FTSE 100 gained 0.8%, while the FTSE 250 advanced 0.5% as investors reacted positively to updates from Unilever, Croda and GSK.
Unilever was among the strongest performers, rising 8% after raising its full-year guidance following second-quarter underlying sales growth of 5.8%, ahead of expectations and its strongest growth rate in more than a decade.
Croda also climbed 8% after confirming its full-year outlook, while GSK added 3.5% after reporting better-than-expected second-quarter results, including core operating profit of £2.80 billion.
Banks struggled, with Barclays falling 4.8% despite reporting solid results, while Lloyds Banking Group and NatWest declined ahead of their own updates later in the week.
On the FTSE 250, Coats Group gained 9% after its results, SSP Group rose 6.2%, while Ceres Power and Raspberry Pi fell as technology shares remained under pressure.
