AI optimism lifts Wall Street ahead of big tech earnings

AI optimism has returned to Wall Street, which lifted chip shares as investors prepared for a swathe of earnings from large tech firms.

Three of the world’s biggest companies, Google-owner Alphabet, Microsoft and Amazon, are expected to show healthy growth when they report earnings later this week.

The results will test whether heavy investment in AI is beginning to deliver meaningful returns for the large tech firms.

Dublin

The Iseq All-Share index mirrored some of the gains seen worldwide on Tuesday as it closed up 1.05 per cent at 14,296.54.

Gene Murtagh-led Kingspan was the best performer of the day. The building materials group saw its share price rise by 3.75 per cent to €95.50.

The next biggest gainers were mining company Kenmare Resources, which rose 2.1 per cent to €2.88, and housing developer Cairn Homes, which advanced by 2 per cent to €2.79.

Life sciences company Malin Corporation’s share price took a hit on Tuesday, falling 4.8 per cent to €5.95. Meanwhile, agri-services group Origin Enterprises also recorded a decrease of more than 4 per cent, with its share price down to €4.12 since the previous close.

London

Britain’s FTSE 100 underperformed European peers ‌on Tuesday, weighed down by HSBC after the bank missed quarterly revenue estimates.

The blue-chip FTSE 100 index closed 0.75 per cent lower at 10,686.54 points, its biggest ​one-day decline in about a month.

HSBC fell 4.7 per cent to its lowest share price in nearly six months, making it the biggest drag on the index. The slide came after the bank reported third-quarter revenue of $18.6 billion (€16.52 billion), missing analysts’ estimates of $19 billion, and was hurt by a ⁠slowdown in its wealth business.

On Tuesday, bank stocks were mixed, with NatWest Group ‌and ‌Lloyds Banking ​Group down 1.25 per cent and 0.3 per cent, while Barclays was up almost 0.4 per cent.

Elsewhere, exhibitions group Informa rose 2.4 per cent despite cutting its full-year revenue growth guidance to 3 per cent from 6 per cent. Dettol maker Reckitt ‌fell 4.9 per cent after ⁠cutting its annual net revenue growth forecast, which dragged the personal care, drug and grocery sector 1.3 per cent lower into negative territory.

UK chancellor of the exchequer John Healey will set out his first budget on Wednesday, with focus ⁠on key fiscal announcements expected against a ​backdrop of high borrowing costs and energy ​prices.

Europe

European stocks steadied on Tuesday, with the pan-European Stoxx 600 index gaining almost 0.5 per cent as oil prices softened and expectations grew that interest rates will hold steady.

The European Central Bank, along with the US Federal Reserve and the Bank of Japan, is due to make policy decisions this week. Economists have widely forecast all three will leave their rates unchanged.

Swiss drugmaker Novartis gained 1 per cent on Tuesday despite recording a $2.2 billion (€1.95 billion) hit over two ​drugs that failed late-stage studies announced in September.

The gain was linked to the company raising its full-year core operating income guidance after reporting third-quarter revenue growth and improved core operating margins, which were supported by increased sales of several key medicines.

Dutch chip-equipment maker BE Semiconductor saw its share price rise 11.4 per cent after Applied Materials doubled its stake in the company to 20 per cent.

New York

Wall Street’s main stock indexes advanced on Tuesday as AI optimism persisted ahead of a raft of key corporate earnings, while easing oil prices also supported risk appetite heading into the Federal Reserve’s policy decision this ​week.

The Fed is widely expected to hold rates steady on Wednesday following an increase last month, though markets are pricing in at least two more hikes by mid-2027 as key inflation indicators remain elevated amid the ongoing US-Iran conflict.

Brent crude slipped for the second straight session in volatile trading, though it still held ​near its highest level since late April.

In early afternoon trading, the Dow Jones rose 0.12 per cent, the S&P 500 gained ⁠0.68 per cent, and the Nasdaq advanced 1.25 per cent.

Steep losses in Boeing, however, capped gains on ‌the Dow, as its shares slumped 9.5 per cent after chief executive Kelly Ortberg said it would not reach its 737 production rate target until early 2027.

Chip stocks rose 3.2 per cent, up for the third straight day after a bruising few weeks, as Broadcom added almost 4 per cent after several Wall Street banks ‌and Blackstone lined up to finance the company’s AI ​chips for Anthropic.

The advances have suggested momentum in AI-linked stocks remained intact a day after Anthropic revealed its filing for a potentially ⁠record-breaking IPO.

Neocloud firms CoreWeave and Nebius, AI server makers Dell and Super Micro, and data storage company Western Digital were also among the best-performing stocks on the day. – Additional reporting: Reuters