Wall Street's major indexes inched higher in choppy trading on Wednesday, as chip stocks rebounded ahead of the first interest rate decision under new Federal Reserve Chair Kevin Warsh.
Shares of richly valued chipmakers, including Broadcom , Micron Technology, Advanced Micro Devices and Intel, rose between 2.5% and 4%.
The S&P 500 tech index gained 1.2%, while the Philadelphia SE Semiconductor index advanced 3.5%.
U.S. stocks have been choppy after a sharp rally on Monday when President Donald Trump announced a preliminary U.S.-Iran peace deal, which sent oil prices tumbling and eased inflation fears.
Seven of 11 major S&P 500 sectors were lower, with communication services shares leading losses after Meta and Alphabet shed 2.2% and 1.6%, respectively.
Software shares came under renewed pressure, with Adobe, Salesforce and Atlassian down between 1.2% and 2.3%.
Investors' focus is now on the Fed's monetary policy decision, set to be released at 2:00 p.m. ET.
Policymakers are widely expected to hold interest rates unchanged at the 3.50%-3.75% range as they wrestle with inflation pressures from higher oil prices fueled by the Middle East war.
Investors will also keep a close watch on the new Fed chair's first press conference for his views on inflation, unemployment and the economic outlook.
The 10-year Treasury yield, the benchmark for global borrowing costs, edged higher to 4.43%.
"The last thing that Warsh wants to do is send the 10-year yield sharply higher. It's really important for markets for the 10-year yield to stay below 4.5, especially now that oil prices are lower," said Jeff Buchbinder, chief equity strategist at LPL Financial.
"So don't expect any fast moves along those lines. And of course, he has to get the buy-in from the committee. So that will be a very long, drawn-out process."
Data showed U.S. retail sales increased more than expected in May, but a slowdown is likely as the cushion that consumers had from larger tax refunds depletes due to rising costs.
Retail sales jumped 0.9% last month after a downwardly revised 0.4% gain in April, the Commerce Department's Census Bureau said. Economists' expected a rise of 0.5%.
Traders see the Fed holding rates through much of the year, but are betting on a nearly 43% chance of a 25-basis-point rate hike in December, according to CME Group's FedWatch tool.
At 09:41 a.m. ET, the Dow Jones Industrial Average rose 77.71 points, or 0.15%, to 52,070.81, the S&P 500 gained 8.14 points, or 0.11%, to 7,519.49 and the Nasdaq Composite gained 89.53 points, or 0.35%, to 26,466.52.
U.S. stocks have partially recovered from an early June slump, with the blue-chip Dow touching record highs for the past two sessions, as a resilient U.S. economy, broadening of the rally beyond tech shares and falling oil prices aided sentiment.
Oil prices hovered near a three-month low, fueled by hopes that the interim peace deal between the United States and Iran would allow oil to leave the Gulf through the crucial Strait of Hormuz.
Still, some uncertainty lingered after Trump said the Iran memorandum of understanding was not final, and he could resume bombing if he did not like it.
Shares of Elon Musk's SpaceX rose 1.6% after surpassing Amazon's market value on Tuesday to become the fifth most valuable company.
CME Group slipped 5% after the exchange operator said its CEO, Terry Duffy, will step down on March 1, and transition to the role of executive chairman.
Advancing issues outnumbered decliners by a 1.18-to-1 ratio on the NYSE, and by a 1.52-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and 4 new lows, while the Nasdaq Composite recorded 28 new highs and 38 new lows.
