US stocks closed higher on Tuesday, led by gains in technology and semiconductor shares as investors assessed corporate earnings, falling oil prices and the Federal Reserve’s latest policy meeting.
The Nasdaq Composite gained 1.14% to 26,467.06, while the S&P 500 rose 0.57% to 7,720.63.
The Dow Jones Industrial Average edged up 2.44 points to 52,364.02, leaving it essentially unchanged.
Investors continued to buy AI-related stocks following Anthropic’s public listing plans, while easing crude prices helped reduce inflation concerns.
The Federal Reserve began its two-day meeting, with markets widely expecting interest rates to remain unchanged.
Chip stocks extend gains as AI optimism returns
Semiconductor shares advanced for a third consecutive session as investors responded to developments surrounding Anthropic’s planned initial public offering and continued demand for AI infrastructure.
Broadcom climbed 4% after a group of banks, including Bank of America, Citi and Morgan Stanley, alongside Blackstone, announced $63 billion in financing for the purchase of Broadcom’s technology for Anthropic.
Micron Technology rose more than 3%, while Advanced Micro Devices gained 5%.
The Philadelphia Semiconductor Index has gained 61.6% this year, outperforming the S&P 500’s 12.8% advance over the same period.
However, the index remained more than 20% below its June 22 record closing high.
Meta Platforms’ decision to increase its planned equity fundraising to $97.5 billion to support its AI expansion also drew attention. Its shares fell 1.2%.
Despite the renewed rally, concerns remain over whether companies can sustain their AI spending amid rising borrowing costs and uncertainty surrounding future investment plans.
Economic data showing an increase in new orders for computers and peripheral equipment provided further evidence of demand for AI-related products.
Corporate earnings produce mixed stock reactions
Third-quarter earnings continued to influence individual stocks as reporting season gathered pace.
Nearly half of S&P 500 companies had reported results, with 83% exceeding expectations, according to the latest available LSEG data.
JetBlue shares jumped 18% despite the airline reporting a larger-than-expected third-quarter loss. Investors responded to its outlook for further margin expansion in the fourth quarter.
United Parcel Service gained 5% after reporting better-than-expected third-quarter results.
Boeing fell 9.7% following a larger-than-expected quarterly loss.
Water-management company Xylem dropped 12.4% after lowering its full-year forecasts, while Sherwin-Williams declined 2.3% following a quarterly profit miss.
Royal Caribbean rose 6.5% after raising its full-year profit forecast.
Technology stocks led gains among the S&P 500’s 11 major sectors, while energy shares recorded the steepest percentage decline as crude prices retreated.
Oil falls as markets await Federal Reserve decision
Oil prices declined as investors monitored diplomatic efforts to end the Middle East conflict.
West Texas Intermediate crude settled 1.70% lower at $100.03 a barrel, while Brent crude fell 1.53% to $113.99.
Iranian Supreme Leader Mojtaba Khamenei and senior national security official Mohsen Rezaei discussed conditions for ending the conflict, helping ease concerns about potential supply disruptions.
The Federal Reserve began its October policy meeting on Tuesday, with its decision due Wednesday afternoon.
Markets broadly expect the central bank to keep its benchmark interest rate in the 3.75% to 4% range.
Investors will focus on policymakers’ guidance for the remainder of the year, particularly the possibility of another rate increase in December as the central bank continues to address inflation.
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