S&P 500 and Nasdaq Climb as Chip Stocks Rally and Fed Rate Decision Looms

US equities advanced on Tuesday, October 27, as a rebound in chip stocks and falling oil prices lifted sentiment ahead of the Federal Reserve's two-day policy meeting and a heavy slate of big-tech earnings. At the open, the S&P 500 gained 0.31% to 7,700.42, the Nasdaq rose 0.50% to 26,299.83, and the Dow edged up just 22 points to 52,384. By midday the gains had extended, with the S&P 500 up 0.61% to 7,723 and the Nasdaq up 1.08% to 26,458. Markets are pricing only about a 10% probability of a rate hike at this meeting, and the 10-year Treasury yield stood at 4.98%.

Broadcom was among the notable chip-sector movers after DA Davidson upgraded the stock to Buy with a $400 price target, and Celestica led the AI hardware trade higher following better-than-expected quarterly results. Nvidia also drew attention after the company agreed to invest $3 billion in Meta, reinforcing its central role in the AI infrastructure buildout. SoFi surged 15% by midday, while Innodata crashed 26% after abruptly laying off roughly 550 workers in India and the Philippines.

Boeing was the session's sharpest large-cap loser, falling about 10% after the company reported a net loss for the third quarter and disclosed it will not reach a production rate of 52 737 Max jets per month until the second half of 2027, held back by slower wing output. The company currently builds around 47 a month, and third-quarter revenue rose 4% to $24.19 billion, beating the $23.84 billion consensus but failing to offset the guidance cut. The selloff put Boeing on pace for its biggest single-day drop since April 2025 and erased roughly $15 billion in market cap.

In a separate market development, General Motors announced plans to leave the New York Stock Exchange and relist on the tech-focused Nasdaq. Analysts were also active: MercadoLibre was upgraded to Buy at Citigroup with a $2,050 target, Ferguson Enterprises was lifted to Buy at Citigroup with a $288 target, and MACOM Technology Solutions was raised to Outperform at Raymond James with a $300 target. On the downside, HubSpot was cut to Neutral at UBS with a $310 target and Moderna was downgraded to Market Perform at William Blair.

Morgan Stanley strategist Michael Wilson outlined a scenario in which the S&P 500 first pulls back to a tactical target of 7,100 before rallying to 8,000, citing three unresolved catalysts: concerns about AI return on capital, midterm election uncertainty, and Federal Reserve liquidity conditions. Wilson noted that 96% of chip stocks have seen drawdowns greater than 20% and 60% of Russell 3000 names are down more than 20%, though he pointed to 27% year-over-year Q3 earnings growth as a foundation for a subsequent recovery.