US stocks today: S&P 500, Nasdaq rises as chip stocks' gains offset Middle East jitters

Equity markets closed with modest gains driven by semiconductor outperformance, signaling renewed rotation into hardware-focused tech after recent volatility. Micron (MU) and Applied Materials (AMAT) led gains, reflecting institutional appetite for cyclical chip exposure amid persistent manufacturing investment narratives and potential supply-chain normalization.

Geopolitical Middle East tensions created a ceiling on upside, preventing broader risk-on acceleration despite positive macro breadcrumbs. Stable jobless claims provided incremental confidence on labor durability, though forward rate expectations remained contested—markets continue to price in competing narratives around Fed pause timing versus recessionary tail risks.

Meta's chip-related selloff alongside semiconductor strength exposes tactical divergence within AI infrastructure plays. The gap reflects market skepticism on proprietary chip economics versus third-party foundry benefits, a nuance often lost in broad sector rallies.

Sector implication: Semiconductor strength reverses recent underperformance and suggests institutional reallocation from defensive rotation back toward capital-intensive tech. However, the muted broad-market follow-through and persistent geopolitical drag indicate conviction remains conditional—not a full risk-on inflection.