Global equities pushed higher into midweek as a rally in chip stocks spread across continents. That sets a cautiously upbeat tone ahead of two events that could shift sentiment: the Federal Reserve’s rate decision and quarterly results from Alphabet and Microsoft.
Wall Street ends higher on tech strength
The S&P 500 rose 0.6% on Tuesday to close at 7,722.60, leaving it within about 1.2% of its all-time high. The Nasdaq Composite gained 1.18% to 26,477.81. The Dow Jones Industrial Average was almost flat, adding 15.99 points to 52,377.57. The small-cap Russell 2000 rose 1.2% to 2,818.87.
Semiconductors did the heavy lifting. The Philadelphia Semiconductor Index jumped 3.6% to 11,482.51, its third straight daily gain. Technology was the leading sector, while energy was the weakest as crude prices slid on hopes that Middle East diplomacy could ease supply worries. The VIX, Wall Street’s fear gauge, fell to 17.53 from 18.39.
For the year, the S&P 500 is up 12.8%, the Nasdaq 13.9%, the Dow 9% and the Russell 2000 13.6%.
Gains narrower than they appear
Beneath the headline numbers, the picture was less convincing. According to The Associated Press, most stocks in the S&P 500 actually fell on Tuesday, with a handful of large AI-linked companies making up the difference. The equal-weight version of the index rose just 0.11%.
On the Nasdaq, 239 stocks hit new 52-week lows against only 62 new highs, and trading volume ran below its 20-day average. Analysts often read such patterns as a sign that a rally lacks broad support, though it can persist while leadership stays strong.
What is driving the chip rally
Several developments have revived appetite for AI-related stocks. Anthropic, the developer of the Claude chatbot, filed for a US stock market listing this week. Its filing disclosed fast-growing revenue alongside heavy losses and refocused investors on how the technology boom will be financed. Meta Platforms also announced plans to raise up to $95 billion in new equity.
Earnings added to the mood in some sectors. Fintech SoFi and cruise operator Royal Caribbean rose after raising their outlooks. Others were punished. Xylem fell more than 14% after cutting its 2026 forecasts and announcing two divestitures, and Boeing slid after mixed quarterly results.
Asia follows Wall Street higher
Asian markets built on the gains on Wednesday. Japan’s Nikkei 225 rose by about 1.2%. South Korea’s KOSPI climbed more than 3% after SK Hynix reported record quarterly operating profit of 83.3 trillion won, more than seven times a year earlier. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.85% in early trading.
US stock futures were little changed and Euro Stoxx 50 futures edged slightly lower, suggesting investors are reluctant to push far ahead of the day’s main events.
Oil, gold and the Fed
Oil has been a key swing factor for inflation expectations. Crude fell below $114 a barrel on Tuesday, retreating from near six-month highs, though supply risks remain. Gold eased toward $4,010 an ounce.
The Fed announces its decision at 2 p.m. Eastern. The central bank is widely expected to keep its benchmark rate at 3.75% to 4.00% after September’s quarter-point hike. Traders are pricing another increase in December, so the tone of the statement and Chair Kevin Warsh’s press conference will matter as much as the decision itself. The European Central Bank and Bank of Japan also meet this week, and economists expect both to hold.
What to watch next
After the close, Alphabet and Microsoft report results, with investors focused on cloud growth against rising capital expenditure. Amazon reports on Thursday. Strong numbers could extend the technology rally, while any sign that spending is outpacing revenue could test the market’s recent optimism.
Market data is for information only and is not investment advice.
