Wall Street ends higher on revived AI momentum

New York: A tech-driven rally in US stocks pushed the market to a higher close on Tuesday, as companies released their third-quarter earnings and the Federal Reserve prepared for its final meeting of the year. The Nasdaq led the gains, benefiting from heightened interest in Anthropic's upcoming initial public offering. While concerns about debt-funded spending and rising borrowing costs had previously weighed on AI stocks, the release of positive financial results and a potential Federal Reserve rate hold on Tuesday provided a boost for the sector.

The Philadelphia Semiconductor Index, despite falling more than 20% from its June 22 record, has outperformed the broader market this year, gaining 62.1% compared to the S&P 500's 12.8% advance. Meta Platforms raised the largest-ever equity fundraising to US$97.5 billion to fund its AI expansion, causing its shares to dip 1.6%. Economic data indicated a surge in computer and peripheral equipment orders, supporting the notion of robust AI-related spending.

The majority of S&P 500 companies reported better-than-expected third-quarter results, with 83% exceeding analysts' expectations. Notable movers included Boeing, which declined 10.7% following a larger-than-expected loss, and Xylem, which fell 14.2% after cutting its full-year profit forecasts. UPS rose 5.8% after raising its annual revenue and profit expectations, while Sherwin-Williams declined 2.7% due to a quarterly profit miss.

Royal Caribbean gained 5.5% after increasing its full-year profit forecast. Microsoft and Alphabet's results are expected on Wednesday, while Amazon.com is slated to report on Thursday. The Federal Reserve convened for its October monetary policy meeting, where a decision to maintain the fed funds target rate in the 3.75% to 4% range was widely anticipated, potentially paving the way for a second rate hike in December.

Confidence in a rate hold was bolstered by the approaching US election. Dow Jones Industrial Average climbed 15.99 points, or 0.03%, to 52,377.57, the S&P 500 increased 45.83 points, or 0.60%, to 7,722.60, and the Nasdaq Composite rose 308.43 points, or 1.18%, to 26,477.81. Technology led the S&P 500's gainers, while energy shares suffered the steepest percentage decline due to easing crude prices, as attention shifted to Middle East peace talks.

Advancing issues outnumbered decliners by a 1.83-to-1 ratio on the NYSE, with 81 new highs and 146 new lows. On the Nasdaq, 3,118 stocks rose and 1,680 fell, with 1.86 advancing issues for every decliner.