AI stocks on Wall Street lifted by Anthropic filing

US stocks rebounded Monday, with the S&P 500 and Nasdaq recovering from two weeks of losses, fueled by Anthropic's IPO filing. The AI-focused company revealed high losses and strong revenue growth in its US initial public offering prospectus, outlining its ambition to create AI systems that could transform the global economy. Despite the challenges of developing such technology, Anthropic proceeded with its listing plans despite a slowdown in the market calendar due to recent volatility.

This filing comes as investors scrutinize the potential returns from substantial AI investments and as the week begins with key economic data releases and corporate earnings reports. Over a third of S&P 500 companies are set to report earnings this week, with major players such as Alphabet, Microsoft, and Amazon facing scrutiny on whether their substantial AI investments are driving growth.

JP Powers, chief investment officer at RWA Wealth Partners in Boston, expressed cautious optimism, noting that while the Anthropic release has boosted sentiment, the market's reaction to other upcoming announcements remains uncertain. The S&P 500 climbed 0.7 percent to 7,676, the Nasdaq rose 0.8 percent to 26,169, and the Dow increased 0.3 percent to 52,361.

Semiconductor and chip-related firms, key beneficiaries of the AI surge, contributed to the market's gains. However, Meta shares fell 1.9 percent after the company announced plans to raise up to $95 billion in equity to fuel its AI-driven expansion of data centers, cloud computing, and infrastructure. The AI sector has faced pressure this month due to concerns about the feasibility of debt-funded spending amid rising borrowing costs.

Despite this, the Anthropic filing helped restore optimism, as other AI-related firms like CoreWeave rebounded from earlier declines. Additionally, megacap and growth stocks experienced mixed performance, with Tesla surging 5.2 percent to reach its highest level in over three months after Barclays upgraded its rating to 'overweight' from 'equal-weight.'

Market expectations for a Federal Reserve rate hike on Wednesday stand at 12.7 percent, as per CME FedWatch, but the central bank's actions are expected to remain firm due to persistent inflation issues. Investors also anticipate the November 3 midterm elections, which will determine control of the US Congress.