Wall St rises as Anthropic’s IPO filing sharpens focus on AI trade

NEW YORK: Wall Street’s main indexes edged up on Monday (Oct 26), led by advances in technology shares, while investors assessed Anthropic’s IPO filing at the start of a week packed with corporate earnings and the Federal Reserve’s interest-rate decision.

Anthropic disclosed steep losses and red-hot revenue growth in its filing for a US initial public offering, laying out its ambition to build AI systems capable of reshaping the global economy despite the high costs of developing the technology.

The AI lab is pushing ahead with its listing plans even as a once-busy fall listing calendar has thinned out, with market volatility prompting companies to delay offerings.

“It’s a challenging environment, to say the least exactly when this IPO will take place, but there’s a lot riding on not only the company, but the AI industry,” said Robert Pavlik, senior portfolio manager at Dakota Wealth In Fairfield.

Semiconductor and chip-related companies, widely viewed as some of the biggest winners of the AI boom, were leading the gains. The broader Philadelphia chips index was up around 1 per cent after a turbulent few weeks.

Anthropic’s filing also arrived at a time when investors are increasingly scrutinising the payoff from AI spending. About a third of S&P 500 companies are scheduled to report earnings this week, including hyperscalers Alphabet, Microsoft and Amazon.com, whose results would be closely watched for signs if the hefty AI investments are translating into growth.

The focus follows a subdued reception to earnings from AI-linked megacaps last week. Meta disappointed investors after raising its annual AI spending forecast again and said it would sell new stock to help pay for it, while Tesla also came under pressure after its results.

Meta said on Monday it plans to raise up to US$95 billion in equity to fund its AI-related expansion of data centres, cloud computing power and other infrastructure. Its shares were last down 1.8 per cent.

The AI trade has come under pressure this month amid concerns that debt-funded spending may become harder to justify in the face of rising borrowing costs.

Neocloud firm CoreWeave fell 2 per cent and Nebius dipped 4.8 per cent after Elon Musk said in an X post markets have “almost entirely shut off access to money” for companies without substantial revenue independent of AI data centres, and predicted neocloud consolidation.

At 9:55am ET (9:55pm, Singapore time), the Dow Jones Industrial Average .DJI rose 236.42 points, or 0.45 per cent, to 52,451.58. The S&P 500 .SPX gained 43.20 points, or 0.57 per cent, to 7,666.88, while the Nasdaq Composite .IXIC edged up 119.43 points, or 0.46 per cent, at 26,074.96.