Wall Street ends higher on revived AI momentum

US stocks finished the trading day on an upward trajectory on Tuesday, buoyed by a renewed interest in artificial intelligence (AI) technologies. The tech-focused Nasdaq index led the market surge, with AI-related stocks gaining momentum as investors awaited the latest quarterly earnings reports. Anthropic's impending initial public offering (IPO) also played a role in the rally, providing some relief for chip stocks that had been under pressure due to concerns about debt-funded spending and rising borrowing costs.

Meta Platforms, parent company of Facebook, announced its largest-ever equity fundraising of US$97.5 billion to finance its AI expansion, causing its shares to drop by 1.6 percent. However, the positive news surrounding Anthropic's IPO seemed to counterbalance the overall negative sentiment in the AI sector. Economic data indicating a rise in new orders for computer and peripheral equipment further supported the rally, suggesting strong AI-related spending.

According to a report by LSEG, nearly half of the companies in the S&P 500 have reported their third-quarter results, with 83 percent of them posting better-than-expected earnings. Boeing experienced a significant drop of 10.7 percent following a larger-than-anticipated third-quarter loss, while Xylem decreased by 14.2 percent after revising its full-year forecasts downward.

Despite these setbacks, United Parcel Service and Sherwin-Williams saw gains, with the former rising 5.8 percent and the latter falling 2.7 percent due to a profit miss.

The Federal Reserve convened for its penultimate meeting of the year, with expectations that they would maintain the federal funds target rate within the 3.75 to 4 percent range, postponing any rate hikes until their final meeting in December. Investors appeared more confident that the Fed would not make any changes at this meeting, partly due to the upcoming U.S. election.

The Dow Jones Industrial Average increased by 15 points or 0.03 percent to 52,377, the S&P 500 gained 45 points or 0.6 percent to 7,722, and the Nasdaq Composite climbed 308 points or 1.2 percent to 26,477.