U.S. stocks finished higher on Tuesday, led by technology shares, as a rally in chipmakers carried the Nasdaq to its second straight gain. Optimism around artificial intelligence got a fresh boost after Anthropic publicly filed its IPO prospectus on Monday, while a pullback in oil prices on hopes of Middle East de-escalation eased some inflation worries. The Dow was nearly flat, and investors stayed cautious ahead of the Federal Reserve’s interest rate decision on Wednesday.
What Moved Markets
The Nasdaq Composite closed at 26,477.81, up 308.43 points, or 1.18%. The S&P 500 gained 45.83 points, or 0.60%, to finish at 7,722.60. The Dow Jones Industrial Average edged up 15.99 points, or 0.03%, to 52,377.57. Smaller companies also did well, with the Russell 2000 rising 1.16% to 2,818.87.
Chip stocks drove the day. The AI trade regained momentum as investors weighed whether heavy spending on AI infrastructure will translate into real revenue growth. Chipmakers also helped lift South Korea’s KOSPI index more than 3%. Meta said it plans to raise up to $95 billion to fund its AI buildout, and Nvidia said it will invest $3 billion in Meta.
Oil slipped as talks involving Saudi Arabia, Turkey, Pakistan and Iran raised hopes of easing tensions. December crude settled near $100 a barrel, down about 1.7%, though Brent remained close to six-month highs because attacks on Saudi Arabia keep supply worries alive. The 10-year Treasury yield held near 4.99%, and the VIX, Wall Street’s “fear gauge,” slipped about 4% to 17.66.
Notable Movers
SoFi Technologies (SOFI) jumped 13.42% after the fintech company reported better-than-expected quarterly results and raised its guidance. Pentair (PNR) also surged, up roughly 12% during the session, after beating third-quarter expectations and pointing to an operational turnaround.
On the downside, Boeing (BA) fell sharply, down about 10% at midday, after missing expectations and cutting its full-year delivery target. Cintas (CTAS) dropped about 7% on reports that the FTC plans to sue to block its $5.5 billion acquisition of UniFirst. Xylem (XYL) slid roughly 9% after missing earnings and lowering its full-year outlook.
Coca-Cola (KO) closed down 1.64%. The company beat estimates and raised its earnings outlook, but weaker demand in North America disappointed investors. UPS rose about 2% after raising its full-year revenue forecast to $92.6 billion and saying holiday demand looks strong.
Looking Ahead
All eyes turn to the Federal Reserve on Wednesday. Most economists expect rates to be held steady, but many anticipate a “hawkish pause,” meaning no change now while signaling that further rate hikes are still possible. Futures markets put only about a 10% chance on a hike, even though recent inflation readings came in hotter than expected. After the close on Wednesday, Alphabet and Microsoft report third-quarter results, giving investors a read on whether big AI investments are paying off. The European Central Bank and Bank of Japan also announce decisions later this week, and Amazon and Apple report soon after. Oil prices and Middle East headlines will remain a key swing factor for inflation expectations and for the market as a whole.