Chipmakers Rebounded After a Rout. They Lifted The Market

Stocks climbed on Tuesday despite increased tensions in the Middle East, buoyed by chipmakers.

The S&P 500 gained 0.89%, while the tech-heavy Nasdaq Composite overperformed, jumping 1.29%. The Dow Jones Industrial Average increased by 0.74%.

Micron Technology led the market, gaining more than 10%. Intel also soared by over 8%. The VanEck Semiconductor ETF jumped .

Investors continue to parse escalating tensions in the Middle East as oil prices remain elevated due to the resumed closure of the Strait of Hormuz and continued clashes.

In this context, Iran reportedly sent the U.S. a proposal for a 10-day ceasefire. Citing two sources familiar with the matter, the Jerusalem Post detailed that the goal is finding a solution related to the key waterway.

Mediators from countries including Qatar, Egypt, Oman and Pakistan submitted the proposal to the U.S., including the creation of a "middle corridor" through the key waterway, through which vessels could pass safely.

Iran has been threatening ships not passing through the route it has approved of, striking those seeking to do so closer to the Omani side. The U.S., in turn, has been providing assistance to some crossing despite the threats.

President Donald Trump appeared to confirm that Iran is seeking to resume negotiations, telling press in the Oval Office on Tuesday that Tehran officials "want to meet desperately to try and end it because they're getting decimated." He went on to say the country is "not finished" in Iran.

Washington is reportedly preparing for both escalation and negotiation. It has told Israel to refrain from taking any action that could derail any chance for de-escalation, but has been making plans for the opposite scenario at the same time.

In the meantime, the U.S. Central Command saying it conducted a 10th night of strikes to "degrade Iran's ability to continue attacking commercial vessels flowing through the Strait of Hormuz."

However, a new report claimed that expanded U.S. operations against Iran could be hampered by reduced stockpiles and damage sustained by bases and troops in the region.

Speaking to The Washington Post, a U.S. official said that Washington is "planning for a wider war," with the Pentagon increasing the amount of military aircraft in the region.