Stocks rose again as chips rallied and WTI slid under $100

The U.S. stock market finished higher for a second straight day on Tuesday, carried again by a small group of AI chip stocks while most of the market fell. The S&P 500 closed up 0.6% at 7,722.60, the Nasdaq composite rose 1.2% to 26,477.81, and the Dow Jones Industrial Average added 15.99 points, less than 0.1%, to 52,377.57, according to the Associated Press. The S&P 500 is back within 1.2% of the record it set earlier this month.

This is the closing companion to our midday piece on the same session, which covered the $63 billion financing vehicle for Broadcom chips leased to Anthropic and the earnings movers before lunch. The close kept the shape of the morning: a narrow rally, a weak energy tape as oil fell, and a Federal Reserve decision still a day away.

Chips rose for a third session

Chip stocks climbed for a third straight session, per Reuters, which tied the move to attention on the details of Anthropic's planned IPO. Broadcom closed up 4% after Bank of America, Blackstone, Citi and Morgan Stanley committed $63 billion to a vehicle that will buy Broadcom XPU accelerators and networking gear and lease them to Anthropic, per the AP. Nvidia rose 0.9% and CoreWeave, which borrows to buy AI chips it rents to cloud customers, gained 7.9%.

Chuck Carlson, chief executive of Horizon Investment Services, told Reuters the Anthropic news looked like a modest relief rally for AI stocks and semiconductors in particular, after weeks in which investors worried about how much the data center buildout was being financed with borrowed money. Reuters also noted the Philadelphia Semiconductor index remains more than 20% below its June 22 record close, even though it has beaten the broader market this year.

The money behind that buildout kept showing up in the tape. Reuters reported that Meta raised its largest-ever equity fundraising to $97.5 billion to pay for its AI expansion, and that the shares fell on the news. A separate data point cut the other way: Reuters cited new orders for computers and peripheral equipment rising, which supports the view that AI-related spending is still strong.

Oil fell on Iran diplomacy and dragged energy

Oil fell for a second day. December Brent futures settled down 1.7% at $113.88 a barrel and December West Texas Intermediate fell 1.8% to $99.90, back under $100, according to the Wall Street Journal as carried by Yahoo Finance. Energy was the weakest of the 11 S&P 500 sectors on the day, per Reuters.

The trigger was diplomacy, not a deal. Iran, Saudi Arabia, Pakistan and Turkey agreed to keep talking about regional security after senior officials met in Tehran on Monday, and Oman said its talks with Iran produced an outline for a temporary arrangement to restore free navigation through the Strait of Hormuz, the Journal reported. Omani Foreign Minister Badr Albusaidi said carrying it out would take compromises from both Washington and Tehran. Mizuho's Robert Yawger told the Journal that the possibility of a peace deal was pressuring prices, with some profit-taking after speculators had built long positions. BOK Financial's Dennis Kissler said tight global supplies and a growing U.S. military presence in the Persian Gulf were still holding prices up.

The offsetting risk did not go away. Houthi forces said on Monday they attacked pumping stations on Saudi Arabia's East-West crude pipeline and Riyadh airport, claims Saudi Arabia has not confirmed, per MoneyCheck's roundup of the oil session. Brent had touched six-month highs last week on fears of attacks on energy sites and shipping.

Lower oil helped keep bond yields in check. The 10-year Treasury yield eased to 4.99% from 5.00% late Monday, per the AP.

Earnings did the rest of the moving

Nearly half of the S&P 500 has now reported third-quarter results, and 83% of those companies beat expectations, according to LSEG data cited by Reuters. The individual moves were large in both directions.

General Motors rose 5.5% after saying it will move its listing from the New York Stock Exchange to the Nasdaq, a switch it tied to its technology strategy and one that could make it eligible for the Nasdaq 100, per the AP. JetBlue closed up 19% despite a bigger summer loss than expected, after chief executive Joanna Geraghty said the airline expects sustained operating profits next year and at least $1 in earnings per share in 2028. The stock had been down nearly 48% for the year. Royal Caribbean gained 5.5% on a stronger-than-expected summer and a raised full-year profit forecast. UPS rose after lifting its annual revenue and profit forecasts, per Reuters.

On the other side, Boeing fell 10.7% after a larger-than-expected quarterly loss, per the AP. Hilton Worldwide lost 2.1% after weaker summer revenue and a fourth-quarter profit forecast whose midpoint came in under expectations; the company cited an increased impact from the Middle East. Sherwin-Williams fell 2.7% after a profit miss, with chief executive Heidi Petz pointing to muted demand through the rest of the year and into 2027 as high mortgage rates weigh on housing and raw material costs rise. Xylem slid after trimming its full-year forecasts, per Reuters.

The economic backdrop helped at the margin. A report showed U.S. consumer confidence improved in October when economists had expected it to weaken further, per the AP.

What Wednesday brings

The Fed wraps its two-day meeting Wednesday. Last month it raised its benchmark rate for the first time in three years to slow inflation, and Wall Street widely expects it to hold this time, with the target range at 3.75% to 4%, per Reuters and the AP. Reuters reported that futures tracked by CME's FedWatch tool point to a second hike of the year in December.

The earnings calendar is heavier than the Fed. Microsoft and Alphabet report Wednesday and Amazon reports Thursday, per Reuters. Those three, plus Meta's raise and the Anthropic filing, will decide whether the AI complex keeps carrying an index in which most stocks have been falling for two days.

Overseas, indexes were mixed across Europe and Asia. Seoul jumped 3.1% and Shanghai fell 1.3%, per the AP.