US stocks moved higher on Tuesday as investors returned to semiconductor shares ahead of a busy week of technology earnings, with trade policy developments and the conflict between the US and Iran also shaping market sentiment.
The Nasdaq Composite led the gains, rising 1.3% as chipmakers extended their recovery after a volatile start to the week. The Dow Jones Industrial Average added more than 0.7%, while the S&P 500 climbed 0.9%, reversing some of Monday’s losses.
Semiconductor stocks continued to strengthen after a rally across Asian markets, with Nvidia gaining almost 2% after the company disclosed it had taken a stake in neocloud provider Nebius. The move added to optimism surrounding the sector as investors prepared for earnings from several of the largest US technology companies.
Attention is now turning to Alphabet’s quarterly results on Wednesday, with investors looking for further details on artificial intelligence spending as major technology companies continue investing heavily in AI infrastructure.
Trade policy also remained firmly in focus after President Donald Trump announced fresh 50% tariffs on a range of Canadian goods, including beer, hockey sticks, milk and chemicals. The measures, due to take effect in 30 days, follow US claims that Canada had engaged in discriminatory trading practices and raise the prospect of renewed trade tensions between the two countries.
Canadian oil imports were excluded from the latest tariffs, a decision that came as crude prices remained near their highest levels since mid-June. Brent crude traded above $91 a barrel after the latest escalation in hostilities between the US and Iran, before easing slightly during Tuesday’s session.
In London, equities also finished higher after Chancellor John Healey pledged to maintain fiscal discipline, while defence and mining stocks provided much of the support for the market.
The FTSE 100 rose 0.6% and the FTSE 250 gained 0.9% as investors responded positively to the new government’s economic priorities.
Prime Minister Andy Burnham told ministers his administration would be a “cost-of-living government” following the announcement of an £850 million electricity bill tax cut, while Healey described fiscal control as his first duty and the basis for long-term economic stability.
Defence companies attracted buyers following Healey’s appointment, with Babcock International climbing 4.1% and BAE Systems adding 1.6%. Mining stocks also enjoyed a strong session as Antofagasta gained 5.8%, Fresnillo advanced 4.4% and Endeavour Mining rose 3.8%.
Segro was among the weakest FTSE 100 performers after rejecting another takeover proposal from US logistics property company Prologis. The latest offer valued Segro at around £13.5 billion through an exchange of 0.0890 new Prologis shares for each Segro share, with Prologis arguing the proposal represented a 9.7% premium to the company’s adjusted net asset value at the end of June.
On the FTSE 250, Mitie surged 39% after agreeing to a recommended £3.1 billion takeover by OCS Group. The offer values the facilities management company at 221.6p per share, comprising 218.5p in cash and a final dividend of up to 3.1p, representing a 45% premium to Monday’s closing price.
Ocado rose 3.1% after securing an agreement to build an automated customer fulfilment centre for a fast-growing European retailer, while AIM-listed IQE jumped 30% after upgrading its full-year revenue forecast following stronger-than-expected first-half trading.
London Stock Exchange Group ended 2.4% lower despite announcing plans for LSE 24, a weekday overnight trading service that will operate between 17:00 and 07:50 to provide investors with extended access across global time zones.
