Global Market Today: Wall Street gains lift Asian stocks as Fed decision looms

Gauges in Japan and South Korea advanced, helping the broader MSCI Inc.’s Asia Pacific equities gauge rise 0.6%. Equity-index futures for US stocks also climbed in early trading.

Tech fund-raising remained in focus with Meta Platforms Inc., Broadcom Inc. and SpaceX all announcing funding plans. That helped push the S&P 500 higher by 0.7%, while the Nasdaq 100 rose 1.1%. The Philadelphia Semiconductor Index jumped 2.8%, its biggest gain since Sept. 21.

Read more: Indian markets rebound, but rising oil prices keep investors cautious

Brent oil extended its declines after settling below $116 a barrel Monday as senior officials from several countries traveled to Tehran in a bid to revive talks aimed at preventing a broader escalation in the Middle East. US crude oil declined for a second consecutive day, dropping 0.4% to around $101.35 a barrel. Elsewhere, short-dated Treasuries slipped, the dollar edged higher and Bitcoin traded below $80,000.

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Anthropic’s offering will be a key test of investor appetite for AI companies after recent concerns over stretched valuations and heavy spending sparked a rout in chip stocks. Investors are also bracing for the Fed’s rate decision Wednesday and earnings from megacap companies, which will offer fresh clues on the outlook for the AI trade.

The company “has clearly rekindled the sort of enthusiasm for all things AI-related that had been missing from the market’s zeitgeist for the past few weeks,” said Steve Sosnick at Interactive Brokers. “This IPO will be an important test of the market’s attitudes and appetites.”Just two hours before Anthropic’s filing, Meta said it’s seeking to raise as much as $95 billion from selling common and preferred stock in one of the largest equity offerings in history. Chipmaker Broadcom has arranged a $63 billion deal with Bank of America Corp., Blackstone Inc., Citigroup Inc. and Morgan Stanley to finance the purchase of chips for Anthropic.

Then, SpaceX signed a roughly $40 billion equipment-finance lease with Apollo Global Management Inc. to pay for the chips needed to fuel its AI ambitions.

Earlier this year, Google-parent Alphabet Inc. targeted raising as much as $85 billion in equity. Anthropic is expected to be followed onto public markets next year by its main competitor, OpenAI.

Anthropic filed its long-awaited S-1, moving closer to becoming the first publicly traded company focused primarily on developing advanced AI models. Investors are scrutinizing the filing for clues on AI demand after weeks of doubts over the trade.

The renewed optimism follows a volatile week for technology shares. The Nasdaq 100 tumbled 2.9% on Thursday, a day after Meta Platforms Inc. raised its capital-spending guidance above operating cash flow, rattling investors seeking evidence that massive AI outlays are paying off.

That question will be tested again this week when some of the biggest AI spenders report earnings. Alphabet and Microsoft Corp. are due Wednesday, followed by Amazon.com Inc. and Intel Corp. on Thursday. Investors will be watching their spending plans and, crucially, whether those investments are generating sufficient returns.

“The big focus is what these companies expect to spend on AI going forward and whether this spending can continue to be financed by cash flows, or if equity and debt issuance will be necessary,” said Richard Saperstein at Treasury Partners.

Elsewhere, Brazilian markets tumbled after President Luiz Inácio Lula da Silva won re-election, fueling concerns that fiscal strains in Latin America’s largest economy will worsen.

An election-heavy fortnight may also add to market volatility, wrote Philip Brown, head of research at FIIG Securities.

“The US mid-term elections will be the clear focus for markets, but the Israel election also has potential geopolitical ramifications, particularly in regards to the conflict in the Middle East,” he wrote.

The Fed provides another major test, with policymakers widely expected to leave rates unchanged after raising them in September. Chairman Kevin Warsh will need to reinforce the central bank’s commitment to containing inflation while explaining why officials opted against another increase.

Markets are pricing about a 10% chance of a hike Wednesday, compared with more than 70% odds of an increase by year-end.

“With so many firms reporting this week, we would typically say that macro factors will take a back seat to idiosyncratic results. However, we have the Fed on Wednesday and what could be a very tricky, complicated press conference,” wrote Christopher Harvey, head of equity and portfolio strategy at CIBC, in a note.