U.S. stocks rose slightly and Treasury yields were mixed after the Federal Reserve held rates steady despite elevated inflation and left the door ajar to a rate hike in December.
The Dow Jones Industrial Average rose 97.53 points, or 0.19%, to 52475.10. The broad based S&P 500 index gained 21.38 points, or 0.28%, to 7743.98, and the tech-heavy Nasdaq Composite added 72.04 points, or 0.27%, to 26549.85.
The Fed held rates at a range between 3.75% and 4.00%. The vote by the rate-setting committee was 10-2, with governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a quarter-point increase.
The yield on the policy-sensitive two-year Treasury declined 0.004 percentage point to 4.731%. The yield on the 10-year Treasury note rose 0.052 percentage point to 5.044%, its biggest gain since Sept. 28. The yield on the 30-year bond rose 0.056 percentage point to 5.360%.
The two-year yield was initially stable before falling sharply during Fed Chairman Kevin Warsh's press conference, who insisted he would not prejudge a December rate decision. Warsh repeatedly cited the need to observe economic readings and other pivotal developments in politics and geopolitics in the "information rich interval" before the next policy meeting.
Still, the dissents were interpreted as an indication that the rate-hike debate, which Warsh described as a "family fight," would continue at the central bank.
The U.S. dollar ticked down after Warsh's comments. The greenback is hovering around multiyear highs against other currencies, in anticipation of Fed hikes in the coming months.
Dollar-sensitive gold futures lost $22.80, or 0.6%, to $4036.00 a troy ounce.
Oil futures rose $2.88 per barrel, or 2.9% to $102.78 a barrel in New York after reports the Trump administration was planning an intensified military campaign in Iran after the midterm elections.
Vice President JD Vance reached out to one of Iran's most powerful hard-liners to revive peace negotiations even as President Trump threatens to restart the war, The Wall Street Journal reported.
The correlation between oil prices and Treasury yields, which was relatively strong earlier this year, has broken down recently, Warsh said during his press conference.
Concerns about the sustainability of debt associated with the AI infrastructure buildout subsided somewhat.
Oracle, which has borrowed aggressively to fund data-center development, saw its shares gain 11% to $144.54 after it forecast brisk revenue growth and said its capital-expenditure binge will soon peak. Shares of the loud computing firm CoreWeave rose 7.3% to $63.93.
The volatility in AI credit and equity securities following the September rate hike was a reminder that the new technology is not immune to interest rates, Warsh said.
"There was a narrative 'They're going to raise rates and it's not going to have any effect on AI'" because of the magnitude of the boom, Warsh said. "[But] interest rates get in the cracks, and they affect, directly or indirectly, almost everything."
Sen. Elizabeth Warren wrote a letter to Anthropic telling the AI leader she was "deeply troubled" by risks the company raised in its initial public offering paperwork. Warren is demanding Anthropic address the potential "existential" threat posed by AI before it goes public.
South Korean memory-chip maker SK Hynix plans to return $75 billion to shareholders this year, a sign it expects surging demand for the hardware that underpins AI to continue. Hynix's outlook helped spark a recovery rally on the Kospi index, which rose more than 6% on the day. The country's benchmark is still roughly 34% below its summer peak.
GE Vernova agreed to acquire a high-voltage grid equipment manufacturer Trench Group for $9 billion, as the maker of energy equipment seeks to capitalize on rising large-load electricity demand created by the AI boom.
Nelson Peltz's hedge fund Trian offered to buy fast-food chain Wendy's for around $1.4 billion.
Boston Scientific retreated 5.8% to $42.43. The medical device maker cut growth projections for the year after an August cyberattack disrupted its manufacturing and shipping operations.
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