An AI-fueled tech rally lifted US stocks on Tuesday as third-quarter earnings continued and oil prices eased. The Nasdaq led gains, the Dow was essentially unchanged, and the Federal Reserve began its October meeting.
An AI-fueled tech rally sent US stocks higher on Tuesday as third-quarter reporting season gained steam. Easing oil prices soothed inflation jitters, and the tech-laden Nasdaq led gains while the blue-chip Dow was essentially unchanged.
The S&P 500 gained 43.86 points, or 0.57%, to 7,720.63, the Nasdaq Composite gained 297.68 points, or 1.14%, to 26,467.06, and the Dow Jones Industrial Average rose 2.44 points to 52,364.02. Technology shares led the S&P 500's 11 major sectors, while energy shares suffered the steepest percentage decline as crude prices eased and attention turned to Middle East peace negotiations.
Anthropic IPO buzz lifts chipmakers
Buzz surrounding details of Anthropic's impending initial public offering helped boost chip stocks. Broadcom climbed 4% after a coalition of banks and Blackstone announced $63 billion in financing for the purchase of Broadcom's technology for Anthropic. Micron was up more than 3%, while AMD advanced 5%.
Still, concerns over debt-funded spending amid rising borrowing costs have weighed on the AI trade this month. The Philadelphia SE Semiconductor index, off more than 20% from its June 22 record closing high, has gained 61.6% this year compared with the S&P 500's 12.8% advance.
Meta increased its largest-ever equity fundraising to $97.5 billion, and its shares fell 1.2%. Matthew Keator of the Keator Group said some signs show AI companies may be pulling back on future spending, adding that "the trade could be a bit over its skis".
Earnings deliver mixed reactions
Nearly half of S&P 500 companies have reported third-quarter results, and 83% of them beat expectations, according to the most recent available LSEG data. Boeing tumbled 9.7% after a bigger-than-expected loss, and Xylem dropped 12.4% after trimming full-year forecasts. Royal Caribbean rose 6.5% after lifting its full-year profit forecast.
Fed expected to hold rates
The Fed's October meeting is widely expected to keep the fed funds target rate at 3.75% to 4%, according to CME's FedWatch tool, saving the second rate hike of the year for December. Keator expects another hike, whether this week or at the next meeting.
Sources: Investing.com, CNBC
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