Updates to afternoon, adds analyst comments and market details

By Caroline Valetkevitch and Niket Nishant

June 30 (Reuters) - U.S. stocks rose on Tuesday and the S&P 500 and Nasdaq were on track to post their biggest quarterly gains since 2020, as investors remained upbeat about economic and earnings growth even amid the Middle East conflict.

On the last day of the second quarter, the Dow was set for its biggest quarterly gain since 2022.

Optimism over signs of progress in efforts to bring the Iran war to a lasting halt has helped stocks recently despite continued military tensions.

Iran and the U.S. on June 17 signed a memorandum of understanding aimed at ending the four-month-old conflict. But exchanges of fire over the weekend have tested that agreement, and a Qatari official said on Tuesday that top U.S. envoys who have arrived in Doha will not hold a high-level meeting with Iran.

"We've had a great first half of the year, certainly better than most expected," said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut.

"In spite of all the geopolitical stuff, the U.S. economy is performing well and corporate earnings are strong."

After a strong first-quarter earnings season for S&P 500 companies, investors are looking forward to second-quarter results in the coming weeks.

The Dow Jones Industrial Average .DJI rose 129.74 points, or 0.25%, to 52,312.48, the S&P 500 .SPX gained 55.29 points, or 0.74%, to 7,495.72 and the Nasdaq Composite .IXIC gained 345.96 points, or 1.33%, to 26,166.10.

Technology .SPLRCT led gains among S&P 500 sectors on Tuesday, but the S&P 500 and Nasdaq are set for monthly losses following recent weakness in heavyweight technology shares.

Strategists at BofA said cyclical, value-oriented sectors such as energy and financials could be the better bet heading into the second half.

Worries about possible interest rate hikes have weighed on the market. Traders are pricing in at least one rate hike by the Federal Reserve by the end of 2026, according to data compiled by LSEG.

Nike NKE.N was due to report quarterly results after the closing bell.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the New York Stock Exchange. There were 259 new highs and 116 new lows on the NYSE. On the Nasdaq, 2,491 stocks rose and 2,275 fell as advancing issues outnumbered decliners by a 1.09-to-1 ratio.