U.S. stocks rose at the start of the new week. Market sentiment was boosted by an announcement from Anthropic, a company developing artificial intelligence (AI), that it is preparing to go public. Investors are also bracing for a busy week full of important events that could influence the further development of stock markets.
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Wall Street rides the AI wave. Markets face a pivotal week with the Fed and Big Tech earnings
The Dow Jones index rose by 146.42 points, or 0.28 percent, to 52,361.58 points. The broader Standard & Poor’s 500 index increased by 53.09 points, or 0.7 percent, to 7,676.77 points. The technology-focused Nasdaq index climbed by 214.04 points, or 0.82 percent, to 26,169.38 points.
In documents related to its planned initial public offering (IPO), Anthropic disclosed rapid revenue growth but also significant losses. The company aims to develop AI systems that could fundamentally transform the global economy, but their development is financially costly. Its plan to go public comes at a time when market volatility has prompted some companies to postpone planned share offerings. Investors are also increasingly scrutinizing whether massive AI spending will generate corresponding returns.
This week, market attention will also focus on Wednesday’s interest rate decision by the U.S. central bank (Fed), Thursday’s economic growth and inflation data, and earnings results from major companies. More than a third of the companies in the S&P 500 index are set to report their results, including tech giants Alphabet, Microsoft, and Amazon. Investors will primarily be watching whether their heavy investments in AI are translating into business and revenue growth.
Today’s gains in U.S. stocks were driven mainly by semiconductor and other technology companies benefiting from the AI boom. Among others, shares of CoreWeave and Nebius, which provide computing capacity and infrastructure for AI, rose. Shares of automaker Tesla gained after investment bank Barclays upgraded its recommendation on the stock.
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Meta under pressure over AI spending, dollar strengthens ahead of Fed meeting and elections
Meta announced plans to raise additional capital in the stock market to expand its AI infrastructure, but its shares fell. Investors have recently been worried about whether massive debt-financed investments in AI will remain sustainable in the long run amid rising borrowing costs.
Markets expect the Fed to leave interest rates unchanged on Wednesday. However, given that inflationary pressures have yet to ease, investors do not rule out the possibility that the Fed may need to raise rates again in the coming months. Market attention is also focused on the U.S. congressional elections, which will take place on November 3 and will determine which party holds the majority in both chambers, Reuters reported.
The U.S. dollar strengthened slightly against a basket of major world currencies. Investors are preparing for a busy week in which five major central banks will decide on monetary policy. The dollar faced selling pressure last week amid a sell-off in technology stocks. The dollar index, which tracks the dollar’s performance against a basket of six major world currencies, rose by 0.2 percent to 102 points. The euro fell by 0.2 percent against the dollar to $1.1177. The dollar rose by 0.4 percent against the yen to 157.51 JPY. The euro strengthened by 0.2 percent against the yen to 176.05 JPY.
Read more: FX Junction
Source: ČTK
