US stocks today: US stocks end higher as AI rally lifts Nasdaq ahead of Fed decision

US stocks ended higher on Tuesday as renewed optimism around artificial intelligence lifted chipmakers, while investors weighed fresh corporate earnings and the Federal Reserve’s policy meeting, Reuters reported.

The Nasdaq Composite led the gains, rising 1.18%, while the S&P 500 advanced 0.60%. The Dow Jones Industrial Average added 0.05%.

AI trade gets a relief rally

The buzz around Anthropic’s impending initial public offering helped chip stocks extend their gains for a third straight session, giving some respite to an AI trade that has faced pressure in recent weeks.


Concerns about the viability of debt funded AI spending amid rising borrowing costs have weighed on the sector this month. The Philadelphia SE Semiconductor index remains more than 20% below its June 22 record closing high, although it has outperformed the broader market this year, Reuters reported.

“The Anthropic news seems to be giving a little bit of a relief rally to the AI stocks, particularly the semis,” said Chuck Carlson, CEO at Horizon Investment Services in Hammond, Indiana.

“Those stocks have gotten clobbered in recent weeks and they were probably due for a bounce.”

Data showing rising new orders for computers and peripheral equipment also supported expectations of continued AI related spending.

Meta raised the size of its largest ever equity fundraising to $97.5 billion to fund its AI expansion, sending shares of the Facebook parent lower.

Earnings keep markets moving

Nearly half of S&P 500 companies have reported third quarter results, with 83% beating expectations, according to the latest LSEG data cited by Reuters.

Boeing shares fell after the company posted a bigger than expected quarterly loss, while Sherwin Williams declined after missing profit estimates. Xylem slid after trimming its full year forecasts.

UPS advanced after raising its annual revenue and profit forecasts, while Royal Caribbean gained after lifting its full year profit outlook.

The Federal Reserve began its two day policy meeting on Tuesday. Markets widely expect the central bank to leave its federal funds target range unchanged at 3.75% to 4%.

Microsoft and Alphabet are due to report on Wednesday, followed by Amazon on Thursday.

Energy shares were the weakest performing S&P 500 sector as crude prices eased, with attention turning to Middle East peace negotiations, Reuters reported.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)