Wall Street ends higher on revived AI momentum

On October 27, US stocks ended higher after an AI-driven tech rally gained momentum during the third-quarter reporting season. The Federal Reserve's upcoming meeting, the penultimate of the year, played a role in the market's positive outlook. Anthropic's upcoming initial public offering (IPO) generated buzz, particularly benefiting chip stocks for the third consecutive session.

Concerns over debt-funded spending amid rising borrowing costs had previously weighed on the AI sector this month. Meta Platforms, the parent company of Facebook, raised the largest-ever equity fundraising of $97.5 billion to fuel its AI expansion, causing its shares to drop. The strong performance of semiconductors, despite being off more than 20% from its June 22 record, helped offset the overall market decline.

Economic data revealed a rise in new orders for computers and peripheral equipment, indicating robust AI-related spending. Three-fourths of S&P 500 companies reported better-than-expected third-quarter results, according to LSEG data. Notable movers included Boeing, which fell after reporting a larger-than-expected loss, and Xylem, which slipped after reducing full-year forecasts.

UPS advanced after increasing its annual revenue and profit estimates, while Sherwin-Williams saw a decline due to a profit miss. Royal Caribbean rose after raising its full-year profit forecast. Microsoft and Alphabet results were expected on October 28, while Amazon.com reported on October 29. The Federal Reserve's meeting on October 27 was widely anticipated to either maintain the fed funds target rate in the 3.75% to 4% range or postpone further hikes until December, providing relief to the market.

The S&P 500 gained 46.28 points, or 0.60%, to close at 7,723.05 points, while the Nasdaq Composite rose 309.69 points, or 1.18%, to 26,479.08. The Dow Jones Industrial Average increased by 25.60 points, or 0.05%, to 52,387.18. Energy shares experienced the steepest percentage decline, impacted by easing crude prices as attention shifted to Middle East peace negotiations.