Why is S&P 500 Index (^GSPC) up today?

The S&P 500 is up 0.38% to 7,543.59 today, trading in a range of 7,513.23 to 7,557.44, as two forces combine to push equities modestly higher: better-than-feared corporate earnings from semiconductor-equipment maker ASML, and a softer inflation print released yesterday. ASML's results reassured investors that demand in the chip supply chain remains intact, sending semiconductor stocks broadly higher — chip stocks and the Nasdaq (QQQ +1.12%) are outpacing the broader index.

Yesterday's inflation data added to the positive backdrop. The Consumer Price Index (CPI) for June came in at a year-over-year rate of 3.8%, down from 4.2% the prior month, and the core CPI (which strips out food and energy) held at 2.8% year-over-year versus the prior reading of 2.9%. Softer inflation typically reduces pressure on the Federal Reserve to keep interest rates elevated, which tends to support equity valuations. Today's Producer Price Index (PPI) — a measure of inflation at the wholesale level — is also on watch, with a core reading forecast at 0.3%.

A countervailing risk is weighing on sentiment and capping the index's gains: U.S. military strikes on Iran have sent crude oil prices to $80 a barrel, raising concerns about energy costs and geopolitical instability. Europe's major markets are lower on the news, while Asia finished higher. Bank earnings are also in focus — Morgan Stanley reported double-digit year-over-year revenue growth in both its Wealth Management and Institutional Securities divisions in the second quarter, joining a run of financial sector results that began last week with JPMorgan Goldman Sachs.

The index currently sits in positive territory as tech-sector enthusiasm outweighs geopolitical caution. The gains are narrower than those in the Nasdaq, reflecting the mixed picture: inflation relief and strong earnings on one side, rising oil prices and Middle East risk on the other.