SK Hynix ADR drops 9%, semiconductors tumble; Nasdaq falls 0.2%, Dow gains 1%

Wall Street closed mixed Tuesday as falling oil prices lifted investor sentiment while semiconductor stocks sold off sharply. Semiconductor shares, including the American depositary receipt of SK Hynix, extended their steep decline as investors remained wary about the sustainability of AI investment.

The Dow Jones Industrial Average rose 537.24 points, or 1.03 percent, to close at 52,747.32.

The S&P 500 gained 15.60 points, or 0.21 percent, to finish at 7,428.78. The tech-heavy Nasdaq Composite fell 55.17 points, or 0.22 percent, to close at 24,876.91.

The session was marked by a broad rotation trade, with "old economy" sectors rallying sharply even as semiconductor stocks — which had led this year's market surge — underwent a steep correction.

Coca-Cola and paint maker Sherwin-Williams, both Dow components, surged 5.0 percent and 8.3 percent, respectively, after posting surprise earnings, providing a significant lift to the index.

Software, data analytics and IT consulting stocks, which had lagged this year amid concerns about AI-driven disruption, also advanced broadly.

Salesforce climbed 4.6 percent, while Cognizant Technology gained 6.9 percent, Accenture 6.9 percent, FactSet 6.8 percent, Adobe 4.8 percent and ServiceNow 4.8 percent.

Semiconductor stocks, by contrast, continued to face heavy selling pressure.

The Philadelphia Semiconductor Index plunged 4.5 percent, extending its losing streak to four consecutive sessions.

Micron led the declines with a drop of 8.9 percent, followed by AMD, down 8.2 percent; Intel, down 5.9 percent; Qualcomm, down 4.2 percent; and Marvell Technology, down 7.8 percent.

The SK Hynix ADR fell 8.98 percent, marking its third consecutive session of steep losses. The ADR now trades roughly 13 percent below its IPO price of $149.

"There's really a broad rotation happening," Ross Mayfield, investment strategist at Baird, told CNBC. "This momentum reversal, which has been going on for six to eight weeks, has much more to do with technical market factors than any change in fundamentals."

Falling oil prices also supported investor sentiment, with West Texas Intermediate futures dropping below $80 a barrel for a third consecutive session.

Brent crude futures settled at $84.09 a barrel, down 4.8 percent from the previous session, while WTI futures fell 4.1 percent to $79.26 a barrel.

Investors are closely watching the outcome of the Federal Open Market Committee meeting on Wednesday.

Wall Street banks expect the Federal Reserve to hold its benchmark interest rate steady at 3.50 to 3.75 percent, though they have not ruled out the possibility of a surprise rate hike this month given uncertainty in the Middle East and rising inflation risks.

According to the CME FedWatch tool, interest rate futures markets priced in roughly a 70 percent probability that the Fed would keep rates unchanged at the meeting.