Wall Street Highlights: S&P 500, Nasdaq Gain As Investors Parse Anthropic IPO Filing

The S&P 500 Index gained 0.7%, while the Nasdaq 100 was up 1.1%. Brent crude fell 1% to $115 a barrel. The Philadelphia Semiconductor Index, or SOX, gained 2.8%, the most since Sept. 21.

Anthropic filed its much-awaited S-1, moving a step closer to being the first company focused primarily on developing the most advanced artificial intelligence models to go public. Investors are parsing all of the facts and figures, with an emphasis on what they mean for AI demand after weeks of doubt in the market.

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"This is a profitable company - I think there's been a lot of assertion that Anthropic and OpenAI lose money," said Gil Luria, head of technology research at DA Davidson, on Bloomberg Television. Anthropic has about "$131 billion of cash and equivalents. That means that the IPO is not an act of desperation, they actually have a war chest that could last them for a while because they're actually not burning through that much cash."

Over at Raymond James, analysts Simon Leopold and Jeff Koche wrote that the filing "reinforces our positive outlook for AI infrastructure spending."

In other tech news, Meta Platforms Inc. said it is aiming to raise as much as $95 billion from the sale of common and preferred stock to fund AI spending, SpaceX signed a roughly $40 billion equipment-finance lease with Apollo Global Management Inc. to pay for the chips needed to fuel its AI ambitions, and Microsoft Corp. said it will offer buyouts to about 60,000 workers.

The focus today was also on the impact from President Luiz Inacio Lula da Silva's win in Brazil's runoff election against market favorite Flavio Bolsonaro. US-listed shares of Brazilian companies and those exposed to the country slumped, while the iShares MSCI Brazil ETF tumbled about 20%.

Last week was a roller coaster ride for the stock market, with the Nasdaq falling 2.9% on Thursday, a day after Meta raised its capex guidance to above its operating cash flow, spooking investors looking for evidence that massive spending on AI is paying off. The SOX tumbled 6.7% on Thursday, while investors rotated into defensive sectors.

Concerns are spilling into credit, with the price of five-year credit default swaps on Meta's debt recently spiking to a record high. And on Sunday, Elon Musk wrote in a post on X that "debt markets have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers."

This week will bring more tech results to review, with Alphabet Inc. and Microsoft Corp. set to report on Wednesday, and Amazon.com Inc. and Intel Corp. reporting on Thursday. Amid the big tech earnings, investors are also awaiting the Federal Reserve's meeting on Wednesday, where policymakers are anticipated to leave rates unchanged after raising them in September.

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"With so many firms reporting this week, we would typically say that macro factors will take a back seat to idiosyncratic results. However, we have the Fed on Wednesday and what could be a very tricky, complicated press conference," wrote Christopher Harvey, head of equity and portfolio strategy at CIBC, in a note. "We think Wednesday afternoon will be all about the macro, but by roughly 4:30 p.m. that day, GOOGL and MSFT will take center stage, and earnings are expected to trump the Fed."

The jitters throughout the market have been enough to turn Max Kettner, chief multi-asset strategist at HSBC, cautious on stocks. The long-time equity bull tactically cut his maximum overweight in stocks to neutral on AI regulation fears heading into the Midterm elections.

Among single-name stock moves, Tesla rose 5.2% as Barclays joins peers on upgrading the electric-car maker, citing M&A opportunity with SpaceX.