Renewed optimism over Anthropic’s path towards an IPO propelled chipmakers higher, but rising debt and doubts over AI infrastructure returns continue to test the market’s technology-led rally.
U.S. stocks extended their advance on Tuesday as renewed enthusiasm around artificial intelligence lifted semiconductor shares and offset lingering worries about the cost of building out the technology. The Nasdaq Composite led the gains, while the S&P 500 also moved higher and the Dow ended little changed, reflecting a market still being driven by a narrow but powerful rally in big technology names. Reuters reported that optimism was revived by Anthropic’s move towards an initial public offering, which helped restore confidence in AI spending after a brief pullback in sentiment.
The strongest move came from chipmakers. Broadcom rose after reports that Bank of America, Citigroup, Morgan Stanley and Blackstone are helping arrange $63 billion in financing tied to Anthropic’s purchases of Broadcom technology. Yahoo Finance data showed Broadcom’s shares closing at $329.17 on October 26, with a market value of about $1.57 trillion, underscoring how central the company has become to the AI trade. Advanced Micro Devices and Micron also advanced as investors continued to favour suppliers tied to data centres and high-performance computing.
The rally was not without its sceptics. Reuters said investors remain uneasy about rising debt loads and the question of whether the huge sums going into AI infrastructure will generate returns fast enough. That tension was visible in Meta, which fell after reports that it has increased its fundraising target to $97.5 billion to support its AI build-out. Even so, the wider semiconductor complex remains strong: Reuters noted that the Philadelphia semiconductor index is more than 60% higher this year, although it is still well below its June peak.
Lower oil prices added to the supportive backdrop. West Texas Intermediate and Brent both slipped after reports that Iranian officials had discussed conditions for ending the war, easing some pressure on markets that have been sensitive to Middle East tensions. Corporate results also helped sentiment. Boeing dropped sharply after posting a larger-than-expected third-quarter loss, while UPS rose on better-than-expected quarterly numbers and JetBlue jumped after raising confidence in its fourth-quarter profitability. LSEG data showed that almost half of S&P 500 companies have now reported third-quarter results, and 83% of them have beaten analysts’ forecasts.
Investors are now turning to the Federal Reserve’s policy meeting and a busy stretch of results from the biggest technology groups. Markets widely expect the central bank to leave rates unchanged, but traders are looking for clues about the likelihood of another increase later this year. Earnings from Alphabet, Microsoft and Amazon will also be watched closely for signs that AI spending is translating into revenue rather than just capital outlays.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
