San Francisco Frontiers - Tech firms gain ahead of Fed decision, results from AI giants

Major US indices advanced, led by the tech-rich Nasdaq, which capitalized on AI enthusiasm following Anthropic's IPO filing while also greeting an announcement from Broadcom about a major new financing deal for AI investment.

"The buy-the-dip trade is taking place," said Briefing.com analyst Patrick O'Hare. "You have the market being led by the AI stocks and particularly the semiconductors and those larger hyperscaler names."

In a share-launch filing Monday, Anthropic, the mother company for Claude AI, reported first-half revenue surged about 1,300 percent year-on-year, but also flagged heavy capital spending ahead.

Investors are awaiting earnings this week from Magnificent Seven members Microsoft, Alphabet and Amazon as well as SK hynix and Samsung.

"The fact that this five year-old company could soon launch a record-breaking IPO helped boost investor confidence, following a decidedly rocky period across AI-adjacent corporations of late," said David Morrison, an analyst at Trade Nation.

Tech shares were under pressure much of last week on worries that massive AI investments might not pay off and that heavily indebted companies face difficulty due to higher interest rates.

But markets being more generous this week. Broadcom climbed four percent after announcing jointly with Citi, Blackstone and Morgan Stanley a $63 billion financing structure to build new capacity for Anthropic.

The Nasdaq piled on more than one percent, while the Dow edged higher, though pressured in part by a 10.7 percent drop in Boeing shares after the aviation giant reported results.

In London, the benchmark FTSE 100 index was dragged down by HSBC, whose share price fell 5.4 percent after its bumper profits undershot market expectations.

Mercedes-Benz shed 3.8 percent in Frankfurt after the German carmaker cut its full-year outlook, underperforming the DAX index which slightly rose overall in afternoon trading. Paris also rose.

Earlier, equities rose in Japan and Korea, also boosted by Anthropic's IPO filing.

Seoul's stock market briefly jumped more than four percent Tuesday thanks to strong gains in chipmakers SK hynix and Samsung.

Tokyo added 1.8 percent on spikes in Tokyo Electron, Advantest and SoftBank.

"Sentiment towards technology has improved as investors assess Anthropic's IPO filing at the start of a week packed with corporate earnings and the Federal Reserve's rate decision," said Fiona Cincotta at FOREX.com.

IG analyst Chris Beauchamp said "there remains hope that this is a more durable rally than those we saw last week, with the caveat that there is still an abundance of macro risk to navigate this week."

The Fed is expected to keep interest rates on hold in a decision Wednesday, though CME Group's FedWatch tool says there is a 78 percent chance of a hike when it meets in December as inflation rises.

Those expectations have boosted the dollar.

The European Central Bank and Bank of Japan are also expected to hold tight in announcements on Thursday and Friday.

Oil prices fell amid renewed diplomatic efforts to resolve the Middle East conflict and as Israelis went to the polls in parliamentary elections.

- Key figures at around 2015 GMT -

New York - Dow: UP less than 0.1 percent at 52,377.57 (close)

New York - S&P 500: UP 0.6 percent at 7,722.60 (close)

New York - Nasdaq: UP 1.2 percent at 26,477.81 (close)

London - FTSE 100: DOWN 0.8 percent at 10,686.54 (close)

Paris - CAC 40: UP 0.7 percent at 7,887.14 (close)

Frankfurt - DAX: UP 0.7 percent at 25,590.77 (close)

Tokyo - Nikkei 225: UP 1.7 percent at 63,268.37 (close)

Seoul - Kospi: UP 3.1 percent at 5,638.34 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 23,041.32 (close)

Shanghai - Composite: DOWN 1.3 percent at 3,648.30 (close)

Brent North Sea crude: DOWN 1.7 percent at $113.88 per barrel

West Texas Intermediate: DOWN 1.8 percent at $99.90 per barrel

Euro/dollar: DOWN at $1.1138 from $1.1174 on Monday

Pound/dollar: DOWN at $1.3316 from $1.3342

Dollar/yen: UP at 157.90 yen from 157.50 yen

Euro/pound: DOWN at 83.64 pence from 83.74 pence

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Q.Nelson--SFF