Shares rise ahead of tech prints, Fed decision

(AWP Alliance News) - Shares ended higher in New York on Tuesday as Anthropic's IPO filing on Monday boosted the artificial intelligence trade, ahead of Microsoft and Alphabet earnings and a US interest rate decision on Wednesday.

The Dow Jones Industrial Average closed up 15.99 points at 52,377.57. The S&P 500 rose 45.83 points, 0.6%, to 7,722.60. The Nasdaq Composite ended up 308.43 points, 1.2%, at 26,477.81.

"The market has these kind of periodic interludes where it gets concerned about AI spending, and then we tend to go back and tech leads us higher," Argent Capital Management portfolio manager Jed Ellerbroek told CNBC. "The light switch has been off for the last two weeks, and it looks like the first two days this week, the switch has been flipped up again."

Nvidia ended up 0.9%, Broadcom gained 4.0% and AMD rose 5.5%. Microsoft fell 0.2% and Alphabet rose 0.8%, ahead of third quarter earnings due out Wednesday. Amazon ended up 1.6%, and SpaceX rose 1.1%.

Micron gained 2.8%. Western Digital jumped 7.0%.

Boeing shares slumped 11% Tuesday after Chief Executive Kelly Ortberg said the company does not expect 737 MAX output to reach 52 per month until the second half of 2027 as it must first "stabilise" output at 47 per month.

"We're making progress, but we still have more work to do, and I'm expecting it'll take us into next year to get fully stable at this rate," Ortberg said of the 47, citing the need for greater predictability in wings production and with the production of fuselages at its Kansas operation.

Ortberg also said the company will achieve USD10 billion in annual free cashflow in 2029.

For the September quarter, revenue rose 4.0% on-year to USD24.19 billion, primarily reflecting higher defence and services volume and less favourable commercial delivery mix. The diluted loss per share narrowed to USD0.26 from USD7.14.

Coca-Cola on Tuesday raised annual guidance as third quarter sales beat expectations despite growth in North America coming in below projections.

Revenue was up 7.4% to USD13.38 billion in the three months ended October 2 from USD12.46 billion a year ago, ahead of USD12.88 billion Visible Alpha consensus. Organic growth was 7%, beating the 4.4% VA consensus. This was driven by a 7% increase in concentrate sales and 1% growth in price/mix.

By region, organic sales grew 16% in Latin America, 7% in Europe, Middle East & Africa, 3% in North America and 6% in Asia Pacific.

All regions beat expectations, bar North America, which was below forecasts for 4.8% growth.

Coca-Cola shares ended down 1.7%.

A barrel of Brent fell to USD114.00 late Tuesday from USD115.48 on Wednesday. West Texas Intermediate fell to USD99.93 from USD101.63.

The falls came after Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday aimed at reducing regional tensions.

Saudi Arabia said the visit was intended to establish open negotiating channels to "prevent the return of military escalation".

The oil price fall saw Shell drop 2.0% and BP fall 3.2% in New York.

Markets widely expect the US Federal Reserve to hold interest rates steady on Wednesday after opting for a hike last month, but a December rate increase is already being pencilled in as high energy prices keep inflation above target.

"In a nutshell, higher oil prices, heavy AI spending, and stubborn inflation are keeping pressure on central banks around the world to consider further rate increases. This week, investors will look to the Federal Reserve, European Central Bank, and Bank of Japan for clues about how much higher borrowing costs could go, even if all three leave rates unchanged, which is expected," wrote Ameriprise Financial Chief Market Strategist Anthony Saglimbene.

The ECB announces its rate decision on Thursday, followed by the BOJ on Friday.

"Here at home, September's unemployment rate of 4.2% and headline consumer inflation of 3.7% year over year leave policymakers with limited reason to consider lowering rates. Employment conditions remain relatively steady, while higher energy/input costs have begun to seep into core inflation of late. Continued demand and AI-related investment have also complicated efforts to bring price pressures under control. Following September's quarter-point rate increase, officials must decide how much additional restraint the economy needs," Saglimbene added.

The yield on the 10-year US Treasury was flat at 4.90% late Tuesday. The 30-year yield was flat at 5.30%.

Against the dollar, the euro was at USD1.1138, down from USD1.1175 on Monday. Sterling fell to USD1.3315 from USD1.3343 Against the yen, the dollar was at JPY157.93, up from JPY157.53.

Gold rose to USD4,060.57 an ounce from USD4,012.00.

In Europe, the FTSE 100 closed down 0.8% in London. The CAC 40 gained 0.5% in Paris. The DAX 40 in Frankfurt rose 0.7%.

In China, the Shanghai Composite Index ended down 1.3%. The Hang Seng fell 0.7% in Hong Kong. The Nikkei 225 in Tokyo rose 1.7%. The S&P/ASX 200 ended up 0.5% in Sydney.

Wednesday's corporate calendar has third quarter results from Airbus, Alphabet, Adyen, eBay, GE Healthcare, and first quarter results from Microsoft

The global economic diary has the UK Autumn Budget, US wholesale inventories and the US interest rate decision.

By Aidan Lane, Alliance News reporter

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