On Tuesday, all three major U.S. stock indexes advanced, with chip stocks and AI-related names once again leading the way, while Anthropic's filing to list on the Nasdaq further boosted market confidence in AI trades.
Oil prices pulled back, and investors turned their attention to the Federal Reserve's interest rate decision, with Alphabet and Microsoft set to release third-quarter results.
The Dow Jones Industrial Average rose 15.99 points, or 0.03%, to 52,377.57. The S&P 500 gained 45.83 points, or 0.60%, to 7,722.60. The Nasdaq added 308.42 points, or 1.18%, to 26,477.81.
Most of the Magnificent Seven rose, with Tesla up 4.04%, Amazon up 1.61%, Apple up 0.93%, Nvidia up 0.90%, and Google up 0.84%, while Microsoft fell 0.24% and Meta dropped 1.64%.
Storage and optical communications sectors continued to strengthen, with Western Digital up more than 6%, SanDisk and Seagate Technology up more than 3%, Lumentum up more than 5%, Coherent up more than 6%, and Marvell Technology up more than 4%.
Broadcom shares climbed 4% after Bank of America, Citigroup, Morgan Stanley and several other banks, along with Blackstone, announced $63 billion in financing to purchase Broadcom technology for Anthropic's use.
Oracle expanded cooperation with Google, Intel, Nvidia and others, lifting related companies, with Cerebras up more than 10%, Oracle up 3.56%, and Intel up 3.6%.
AI stocks continued to benefit from renewed market enthusiasm after Anthropic publicly filed its IPO investor prospectus on Monday, highlighting both the promise and the risks of artificial intelligence. This would be another major tech IPO in 2026, following SpaceX's blockbuster listing in June.
Tech faces another catalyst on Wednesday, when Alphabet and Microsoft report third-quarter results.
"The market periodically has these interludes where it gets concerned about AI spending, and then we tend to get back on the track of tech leadership," said Jed Ellerbroek, portfolio manager at Argent Capital Management. "For the past two weeks that light switch was off, and the first two days of this week, it seems like the switch has been flipped back on."
Despite recent concerns, Ellerbroek still sees "strong" confidence that companies owning data centers will continue to grow. "The crack that's underlying is still just how volatile the capital markets can be," he added.
Falling oil prices on Tuesday also supported sentiment after Iran's Supreme Leader Mojtaba Khamenei and his top national security official Mohsen Rezaei discussed conditions for ending the country's conflict.
At the close, December light crude futures on the New York Mercantile Exchange fell $1.86 to $99.90 a barrel, down 1.83%. December Brent crude futures fell $1.93 to $113.88 a barrel, down 1.67%.
JetBlue surged 19% even though the company reported a wider-than-expected third-quarter loss, saying it expects margins to expand further in the fourth quarter.
UPS shares rose more than 5% after the delivery giant posted better-than-expected third-quarter results.
Expectations for the Fed's rate decision on Wednesday also continued to build. Policymakers began a two-day meeting on Tuesday to discuss whether above-expected inflation requires a rate hike. According to CME data, investors are not convinced the Fed will act, pricing in only a 10% chance of a hike.
"This feels like a rare 'nothing happens' Fed meeting under Warsh. It feels like his communication strategy will lead to fewer of these meetings without surprises, but this one really looks like it will be one, mainly because the midterm elections are next week," Ellerbroek also said. "My guess is the next meeting in December will be another 'live' one."
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