Dow Jones surges 1% despite NASDAQ decline amid chip stock sell-off

Wall Street witnessed a mixed trend on Tuesday, with the Dow Jones Industrial Average and the S&P 500 closing in positive territory, while the tech-heavy NASDAQ Composite declined.

The Dow Jones rose 537 points, or 1.03%, to end at 52,747.32. The S&P 500 rose 0.21% to 7,428.78, while the NASDAQ Composite, which fell 1% during the session, settled 0.22% lower at 24,876.91.

The Dow Jones was supported by a rally in stocks of Sherwin-Williams, Coca-Cola, and Boeing after reporting better-than-expected earnings.

Sherwin-Williams' quarterly earnings exceeded expectations, leading to the stock rising more than 8%. The second-quarter earnings of Coca-Cola beat expectations as the company raised its full-year outlook. Similarly, Boeing posted better-than-expected cash flow, leading to the stock gaining 5%.

Chip stocks continued their downtrend on Tuesday, with Western Digital, AMD, and Micron declining 7%, 8% and 9%, respectively. The SK Hynix ADR slipped 9%, while Sandisk dropped 14%.

The VanEck Semiconductor ETF (SMH) was down 3.45%, closing in red for the fourth consecutive day.

Brent crude, the international benchmark, rose 4.31% to $87.72 per barrel. West Texas Intermediate (WTI) gained 4.34% to $82.72 a barrel.

This comes after US Central Command, in a post on X, said that Islamic Revolutionary Guard Corps (IRGC) forces launched multiple ballistic missiles from Iran in an attempted surprise attack on American forces based in the Middle East. The missiles were successfully intercepted.

The Centcom and the Saudi Arabian Armed Forces also conducted precision strikes in Iraq against "Iran-aligned terrorists that the Islamic Revolutionary Guard Corps (IRGC) directed to attack U.S. forces and Saudi energy infrastructure".

"U.S. and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours," the US Central Command added.

The market trends will be decided by the Federal Reserve rate decision on Wednesday.