Stock Market Today: Nasdaq, S&P Rise as Chips Rally

The stock market today saw the Nasdaq and the S&P 500 edge higher on Tuesday, October 27, as a rally in chip stocks and a slide in oil prices offset caution ahead of the Federal Reserve’s policy decision, while the Dow Jones Industrial Average stayed flat. The three major indexes moved in different directions, but the tone of the session was set by the technology sector, where a major financing deal for artificial intelligence computing lifted the shares of the companies that make the chips the industry runs on.

At 09:57 a.m. Eastern Time, the Dow Jones Industrial Average had fallen 73.92 points, or 0.14 per cent, to 52,287.66, while the S&P 500 had gained 12.45 points, or 0.16 per cent, to 7,689.22, and the Nasdaq Composite had risen 98.08 points, or 0.38 per cent, to 26,267.46. By the afternoon, the Dow was flat at last look, cooling slightly from the morning’s surge, while the Nasdaq and the S&P 500 were comfortably in the black, the tech-heavy indexes propped up by Broadcom’s funding news. Six of the 11 major S&P 500 sectors advanced, with technology leading the gains and energy lagging behind.

The session came a day after the major averages had ended higher, following the news that Anthropic had filed to go public on the Nasdaq, and it carried the same theme forward: the market’s attention is fixed on artificial intelligence, on the companies that supply it, and on the Federal Reserve’s decision on interest rates, which is due on Wednesday.

The Indexes: Nasdaq Leads, Dow Stalls

The stock market today opened on a positive note, with all three major indexes moving higher shortly after the opening bell. The S&P 500 gained 0.3 per cent and the tech-heavy Nasdaq Composite advanced more than 0.5 per cent in the early trading, while the Dow Jones Industrial Average rose 74 points, or 0.1 per cent. The early gains were driven by the same forces that had lifted the market the day before: the chipmakers, the artificial intelligence trade, and the slide in oil prices.

The Dow’s early strength did not last. A 3.4 per cent drop in the shares of paintmaker Sherwin-Williams, following a quarterly profit miss, weighed on the blue-chip index, and by mid-morning the Dow had slipped into negative territory. The S&P 500 and the Nasdaq, by contrast, held their gains, supported by the technology sector and by the rally in the semiconductor stocks. The divergence between the indexes reflected the split in the market: the companies tied to artificial intelligence were rising, while the older industrial and consumer names were struggling.

By the afternoon, the pattern was clear. The Dow was flat, the Nasdaq was eyeing another triple-digit gain, and the S&P 500 was comfortably higher. The market’s breadth was narrow, with the gains concentrated in the technology sector, but the direction was positive, and the session’s tone was one of cautious optimism rather than the anxiety that had marked the market earlier in the month.

Chip Stocks Power the Rally

The standout performers of the day were the chip stocks. The Philadelphia Semiconductor Index rose 1.8 per cent, up for the third straight day after a bruising few weeks, while the neocloud firms CoreWeave and Nebius were also trading sharply higher. The rally was driven by a single piece of news: a group of banks, including Bank of America, Citi and Morgan Stanley, along with the investment firm Blackstone, had announced 63 billion dollars in financing for the purchase of Broadcom’s technology for Anthropic.

The development lifted sentiment across the chipmakers. Broadcom’s shares rose more than 2 per cent in early trading and were up 3.71 per cent by mid-morning, while Micron Technology rose more than 2 per cent, Advanced Micro Devices gained nearly 2 per cent in early trading and 3.29 per cent by mid-morning, and Nvidia rose around 1 per cent. SK hynix’s American depositary receipts were up 1.54 per cent. The equipment, Broadcom’s artificial intelligence accelerators and networking gear, is set to be leased to Anthropic, with deliveries expected to begin in 2027.

The chip rally also helped the broader market. The technology sector led the gains among the S&P 500’s 11 major sectors, and the strength in the semiconductor names spilled over into the wider market, lifting the Nasdaq and the S&P 500 even as the Dow struggled. The rally was the third straight day of gains for the chip index, a recovery after a difficult few weeks in which the sector had fallen sharply on concerns about the viability of debt-funded spending in the face of rising borrowing costs.

Tesla’s shares also climbed, rising close to 3 per cent and building on a gain of more than 5 per cent from the previous session. The electric vehicle maker’s shares have been volatile in recent weeks, but the two-day move suggested that the market’s appetite for the large growth stocks was returning, at least for the moment.

Oil Slides as Tensions Ease

Oil prices also eased, and the slide in crude supported the market’s risk appetite. Investors hoped for a de-escalation in the regional conflict, and the easing of oil prices removed one of the pressures that had been weighing on the market. United States West Texas Intermediate futures shed nearly 1 per cent to trade around 101 dollars per barrel, while Brent crude futures slipped about 1 per cent to roughly 114 dollars a barrel.

By mid-morning, the picture was similar. West Texas Intermediate crude for December delivery had fallen 0.37 per cent to 101.38 dollars a barrel on the New York Mercantile Exchange, while Brent crude on the ICE Futures Exchange was down 0.68 per cent at 115.02 dollars a barrel. Brent had slipped for the second straight session in volatile trading, though it still held near its highest level since late April. The dollar index, which tracks the greenback against a basket of major currencies, gained 0.26 per cent to trade at 102.228.

The oil market’s move reflected a shift in the geopolitical outlook. The market had been pricing in the risk of a wider conflict in the Middle East, and the hope that tensions might ease was enough to take some of the premium out of the price. The Federal Reserve’s decision, due on Wednesday, was also a factor: the central bank is widely expected to hold rates steady, but the market is watching for clues about whether another rate rise could follow before the end of the year, and the oil price is one of the inputs into that decision.

Earnings Movers: UPS, JetBlue, Sherwin-Williams, Meta

The corporate earnings season provided the day’s other big moves, with a series of results that sent individual shares sharply in both directions. United Parcel Service added more than 1 per cent after the delivery giant reported better-than-expected third-quarter results, a sign that the demand for shipping was holding up despite the economic uncertainty. The result was a relief for investors who had worried that the consumer slowdown would hit the delivery companies first.

JetBlue jumped more than 11 per cent, despite reporting a wider-than-expected quarterly loss, as the airline said it expected further margin expansion in the fourth quarter. The market’s reaction suggested that investors were looking past the loss and focusing on the outlook, and that the airline’s forecast of improving profitability was enough to outweigh the disappointment of the quarter itself. The move was one of the largest of the day, and it underlined how much the market is willing to reward a company that can show a path to better margins.

Whirlpool fell after posting a surprise quarterly loss, a reminder that not all of the earnings news was positive. The appliance maker’s result was a disappointment, and the shares dropped as investors reassessed the company’s prospects. The contrast with UPS and JetBlue was stark: the market was rewarding the companies that beat expectations and punishing the ones that missed them, and the gap between the two was widening.

Meta fell 1.1 per cent after the company increased its largest-ever equity fundraising to 97.5 billion dollars to fund its artificial intelligence expansion. The effort has also drawn interest of up to 5 billion dollars in total from Nvidia, Advanced Micro Devices and Broadcom. The plan comes as growing concerns over the viability of debt-funded spending in the face of rising borrowing costs have weighed on the artificial intelligence trade this month, and the market’s reaction suggested that investors are watching the scale of the spending with a wary eye.

Sherwin-Williams fell 3.4 per cent after a quarterly profit miss, and the drop weighed on the Dow, which counts the paintmaker among its components. The miss was a reminder that the consumer economy is not uniformly strong, and that the companies exposed to the housing market are facing headwinds. Coca-Cola’s shares were flat after its earnings, a neutral result in a session that was defined by the bigger moves elsewhere.

All Eyes on the Fed

The Federal Reserve’s October policy decision dominated the market’s attention, even though the decision itself is not due until Wednesday. The central bank began its two-day policy meeting on Tuesday, and it is widely expected to keep rates unchanged, but traders will look for clues on whether another rate rise could follow before the end of the year.

The Fed is widely expected to hold rates steady on Wednesday following an increase last month, though markets are pricing in at least two more hikes by mid-2027 as key inflation indicators remain elevated amid the ongoing United States-Iran conflict. The expectation of further rate rises is a reminder that the central bank’s fight against inflation is not over, and that the market’s hopes for a rapid return to lower rates may be premature.

The economic data released on Tuesday gave the Fed something to think about. Durable goods orders for September rose 1.8 per cent, past the 1.7 per cent estimates, while consumer confidence rose for the first time in four months. The data suggested that the economy was holding up better than expected, which is good news for the market in the short term but complicates the Fed’s task: a strong economy makes it harder to argue that rates should come down, and easier to argue that they should stay where they are, or even rise.

What Happens Next

The market’s attention will turn on Wednesday to the Federal Reserve’s decision, and to the statement and press conference that accompany it. The central bank is expected to hold rates steady, but the market will be listening for any hint about the path of rates in the coming months, and for any sign that the Fed is worried about the inflationary effects of the conflict in the Middle East or about the scale of the spending on artificial intelligence.

The earnings season will also continue, with more companies reporting in the days ahead, and the market will be watching for signs that the consumer economy is holding up. The results from UPS and JetBlue suggested that demand is resilient, while the results from Whirlpool and Sherwin-Williams suggested that it is not uniformly strong. The balance of the earnings season will tell the market which of those stories is the more accurate one.

For now, the market’s mood is cautiously optimistic. The Nasdaq and the S&P 500 are higher, the chip stocks are rallying, and the oil price is easing. The Dow is flat, the Fed is looming, and the risks have not gone away. But on Tuesday, at least, the market’s attention was on the rally, and the rally, for the moment, was enough.

Source: MarketWatch