The S&P 500 and Nasdaq rose on Tuesday as oil prices eased ahead of the Federal Reserve's policy decision. Chip stocks extended their rally, while earnings moved individual shares sharply.
The S&P 500 and Nasdaq advanced on Tuesday as easing oil prices supported risk appetite before the Fed's policy decision this week. Investors also worked through a raft of corporate earnings.
At 09:57 a.m. ET, the S&P 500 gained 0.16% to 7,689.22, and the Nasdaq Composite rose 0.38% to 26,267.46. The Dow Jones Industrial Average fell 0.14% to 52,287.66, weighed down by a 3.4% drop in Sherwin-Williams after a quarterly profit miss.
Fed expected to hold as oil slips
The Fed is widely expected to hold rates steady on Wednesday after an increase last month. Markets, however, are pricing in at least two more rate hikes by mid-2027, because key inflation indicators remain elevated amid the ongoing US-Iran conflict.
Oil gave some relief. Brent crude slipped for the second straight session but still held near its highest level since late April. CNBC reported that Brent shed about 1% to roughly $114 a barrel, as investors hoped for a de-escalation in the conflict.
Chips and AI names lead the move
Chip stocks rose 1.8%, up for the third straight day after a bruising few weeks. According to CNBC, Broadcom climbed more than 3% after a coalition of banks and Blackstone announced $63 billion in financing for the purchase of Broadcom's technology for Anthropic.
Meta, however, fell 1.1% after it increased its largest-ever equity fundraising to $97.5 billion to fund AI expansion. Growing concerns over the viability of debt-funded spending in the face of rising borrowing costs have weighed on the AI trade this month.
Investors now look to earnings from Alphabet, Microsoft and Amazon.com later this week for evidence that heavy AI investment is translating into growth.
Earnings drive single-stock swings
Boeing eased 1.8% after a bigger-than-expected third-quarter loss, and Xylem dropped 8.8% after trimming full-year forecasts. Royal Caribbean, by contrast, rose 6.5% after lifting its full-year profit forecast.
Separately, CNBC reported that JetBlue jumped 11% despite a larger-than-expected third-quarter loss, because the company expects further margin expansion in the fourth quarter.
Sources: Investing.com (Reuters), CNBC
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