US stocks eye big tech earnings as Fed holds rates steady

On Wednesday, October 28, US stocks experienced a mixed session before closing higher, as investors digested the Federal Reserve's decision to keep interest rates steady. The central bank opted to hold rates, citing a need for more data to combat inflation despite ongoing price pressures. Two dissenting members of the panel advocated for an immediate rate increase.

Throughout the day, major US indices traded within a narrow range, with the S&P 500 ending up 0.3 percent. B. Riley Wealth Management's Art Hogan emphasized that the market's primary focus this week is analyzing earnings from major companies, particularly those in artificial intelligence, such as Microsoft and Alphabet, which is Google's parent company.

Fed Chair Kevin Warsh explained that the Fed's objective is to prevent price changes in certain sectors from spilling over into the broader economy. He also stated that the Fed requires more information in the coming weeks to determine the appropriate policy stance to bring inflation back to its 2 percent target.

Earlier in the day, SK hynix, a South Korean chipmaker, delivered a strong quarterly report, with operating profits seven times higher than the previous year. The company plans to return an additional $45 billion to shareholders. SK hynix's performance contributed to a significant rally in the tech sector, with Seoul's Kospi index surging over six percent.

AI-related stocks saw a broad increase after Anthropic, the creator of Claude AI, reported a staggering 1,300 percent revenue growth in the first half of the year. The company also announced heavy capital spending, fueling optimism ahead of an anticipated IPO next month. Although AI stocks experienced a downturn earlier in the month due to concerns about massive investments and debt levels, investor sentiment improved following Anthropic's IPO announcement.

In other markets, oil prices rose as reports emerged that the United States planned to launch a new military attack in Iran following the upcoming midterm elections. The US dollar, meanwhile, cooled slightly after Warsh's press conference, indicating that the central bank may not require further rate hikes at this time.