Nasdaq Closes at 26,523 as Chip Stocks Rise and Fed Decision Looms
Key Facts
The Nasdaq Composite closed at 26,523 on October 27, according to EL7 data, as technology stocks linked to artificial intelligence rose ahead of the Federal Reserve’s decision. A Reuters reading published during the session at 09:57 a.m. Eastern Time showed the index up 0.38% at 26,267.46, a snapshot that did not represent the final close. At the same time, the S&P 500 rose 0.16% to 7,689.22, while the Dow Jones fell 0.14% to 52,287.66. Reuters said the Nasdaq led market gains as momentum returned to AI-backed technology stocks and the third-quarter earnings season accelerated. The session offered investors a mix of support from technology shares and uncertainty over the path of interest rates at the central bank meeting.
Semiconductor stocks rose 1.8%, posting gains for a third consecutive session, and technology led the advancing sectors in the S&P 500. Six of the 11 sectors rose, while energy lagged. The performance came as Reuters said the stock rebound was tied to renewed momentum in companies benefiting from spending on artificial intelligence. New orders for computers and peripheral equipment also supported the view that spending related to these technologies remained strong. Company moves, however, were mixed: Meta raised its record stock financing to $97.5 billion to fund its AI expansion, and the announcement weighed on the company’s shares.
Investors found additional support in falling oil prices, which Reuters said boosted risk appetite ahead of the Fed’s decision. Brent crude fell for a second consecutive session but remained near its highest levels since late April. Across the broader stock market, the third-quarter earnings season had reached about half of S&P 500 companies. The latest available LSEG data showed that 83% of companies that had reported results beat expectations. This coincided with investors awaiting reports from major technology companies: Microsoft and Alphabet were expected to report on Wednesday, and Amazon on Thursday.
On the economic data front, U.S. durable goods orders rose 1.8% month over month in September and 9.9% year over year, following an August increase revised to 0.1% from an earlier reading showing a 0.1% decline. The monthly gain was above the 1.4% forecast in an Action Economics survey. But the increase in the headline figure was based largely on aircraft orders, which jumped 23.2%, as nondefense aircraft orders rose 28.4%. According to Haver Analytics, these orders contributed substantially to growth in total orders. These details put September’s reading in context: the strong overall increase was not evenly distributed across components of demand.
The Federal Open Market Committee’s meeting began on Tuesday, October 27, and runs for two days, with a press conference scheduled for Wednesday, October 28, at 2:30 p.m., according to the Federal Reserve’s calendar. Reuters broadly expected rates to remain unchanged on Wednesday, following an increase the previous month, while markets were pricing in at least two further increases by mid-2027. The CME FedWatch tool, according to another Reuters report, indicated expectations that the target range would hold at 3.75% to 4% at the October meeting, with the December meeting in focus. The Fed raised the range by a quarter of a percentage point in September to 3.75%–4%, and approved the decision unanimously, with a 12-0 vote. The September statement said economic activity was expanding at a solid pace and inflation remained elevated.
Investors were also focused on what the monetary policy path might signal for coming meetings. A Reuters report said markets were pricing in at least two further increases by mid-2027, despite expectations that rates would remain unchanged at the October meeting. An AP report had also noted that investors saw almost no chance of a rate increase in October, after some investors and economists had expected a quarter-point increase following higher-than-expected inflation data. The report said the average 30-year fixed mortgage rate stood at 7.4% earlier in October before falling to 7.32% in the previous week, compared with just under 6.2% a year earlier. It also said inflation had come in above most economists’ expectations for two consecutive months, and diesel had reached $6.53 per gallon in late September before falling to $6.35.
The next dates on the Fed’s calendar include the release of the October meeting minutes on November 18, followed by the committee’s meeting on December 8 and 9. Microsoft and Alphabet were expected to report on Wednesday, and Amazon on Thursday, keeping major technology company earnings among the markets’ near-term events. An AP report said some economists and investors might interpret Jerome Powell’s reaffirmation of the aim to return inflation to the 2% target more quickly as a signal of a possible rate increase at the December meeting. Fed watchers also expected two or three dissenting votes among the 12 voting officials at the October meeting, after the September decision was approved unanimously. Markets are awaiting Wednesday’s decision and the press conference scheduled for the same day.