Wall Street closed higher on October 27 as renewed momentum in artificial intelligence (AI) stocks coincided with advancing third-quarter corporate earnings and the Federal Reserve’s penultimate monetary policy meeting of the year.
The Nasdaq Composite led the gains, rising 1.18% to 26,477.81, buoyed in part by increased optimism around Anthropic’s upcoming initial public offering. This development helped chip stocks rebound for the third consecutive session, partially countering earlier losses tied to concerns over debt-funded spending amid rising borrowing costs. The Philadelphia Semiconductor Index, despite retreating more than 20% from its June peak, has outperformed broader markets year to date, gaining roughly 62%, compared with the S&P 500’s 12.8% advance.
Meta Platforms, however, saw its shares decline 1.6% after announcing a record $97.5 billion equity fundraising to support its AI investments. “Those stocks have gotten clobbered in recent weeks and they were probably due for a bounce,” said Chuck Carlson, CEO of Horizon Investment Services. He noted that Anthropic’s news appeared to provide relief to semiconductor companies.
Supporting this trend, economic data pointed to rising new orders for computers and peripheral equipment, signaling robust AI-related demand. Nearly half of S&P 500 companies have reported third-quarter results, with 83% surpassing expectations, according to LSEG data.
Among notable movers, Boeing shares fell 10.7% following a worse-than-anticipated quarterly loss, while water-management firm Xylem dropped 14.2% after revising down its full-year outlook. Conversely, United Parcel Service climbed 5.8% after raising its annual revenue and profit forecasts. Sherwin-Williams shares slipped 2.7% due to a quarterly profit miss, weighing on the Dow Jones Industrial Average, which edged up 15.99 points, or 0.03%, to 52,377.57. Royal Caribbean advanced 5.5% after boosting its full-year profit guidance.
Market participants also awaited results from major technology companies Microsoft and Alphabet, scheduled for release on October 28, followed by Amazon’s earnings report on October 29.
The Federal Reserve held its monetary policy meeting on October 27, with markets widely anticipating a decision to maintain the benchmark interest rate in the 3.75% to 4% range. According to CME’s FedWatch tool, a rate pause appears likely, deferring any further hikes to the final meeting in December. “There seems to be more confidence that the Fed isn’t going to do anything at this meeting, partly because we have an election,” Carlson added, suggesting relief that monetary policy would not impede the stock rally.
The broader S&P 500 rose 0.60% to 7,722.60, with technology leading sector gains. Energy shares experienced the largest percentage decline, pressured by easing crude oil prices as investor focus shifted toward ongoing peace negotiations in the Middle East.
On the New York Stock Exchange, advancing stocks outnumbered decliners by nearly 2-to-1, with 81 new highs and 146 new lows reported. The Nasdaq posted 62 new highs and 239 new lows, with advancing issues outpacing decliners by approximately 1.9-to-1. Trading volume reached 16.10 billion shares, below the 20-day average of 17.18 billion shares.