NEW YORK: US stocks closed higher on Monday, with the S&P 500 and Nasdaq coming off consecutive weekly declines, as Anthropic's IPO filing helped boost sentiment in AI-related stocks in a week filled with a host of market catalysts.
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-lively autumn IPO calendar has slowed, with recent market volatility prompting companies to delay offerings.
Anthropic's filing comes as investors increasingly dissect the potential payoff from massive AI spending and at the start of an eventful week. On tap are the Federal Reserve's policy statement on Wednesday, readings on economic growth and inflation on Thursday and a slew of corporate earnings reports throughout the week.
More than a third of S&P 500 companies are scheduled to report earnings this week, including hyperscalers Alphabet, Microsoft and Amazon.com, whose results will be parsed for signs of whether the hefty AI investments are translating into growth.
"Today's all about the Anthropic release, so we're back on a little bit of an optimistic tilt, I would say. But there's a lot in that release. It will be interesting to see how well things are received when they actually come to list," said JP Powers, chief investment officer at RWA Wealth Partners in Boston.
"The risk is maybe a little bit of a whipsaw if things aren't all moving in the same direction. A little optimism today, but who knows what will happen from some of these other releases this week," he said.
The Dow Jones Industrial Average rose 146.42 points, or 0.28%, to 52,361.58, the S&P 500 gained 53.09 points, or 0.70%, to 7,676.77 and the Nasdaq Composite gained 214.04 points, or 0.83%, to 26,169.38.
Semiconductor and chip-related companies, widely viewed as some of the biggest beneficiaries of the AI boom, helped fuel the gains. The broader Philadelphia chips index was up 2.8% on the day but is still down 12.2% on the month.
Meta shares closed down 1.9% after the social media company said 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.
The AI trade has come under pressure this month amid concerns that debt-funded spending may become harder to justify in the face of climbing borrowing costs.
The Anthropic filing helped buoy sentiment, however, as neocloud firms, including CoreWeave, erased earlier declines.
Other AI-linked companies, including photonic product makers Lumentum and Coherent, were among the best-performing S&P 500 stocks. Lumentum and Coherent gained about 8% and 6%, respectively. The technology index led gains among the 11 major S&P 500 sectors, climbing 1.5%.
Megacap and growth stocks were also mostly higher. Tesla jumped 5.2% to close at its highest level in more than three months after Barclays upgraded its rating on the stock to "overweight" from "equal-weight."
Markets are pricing in only a 12.7% chance of a rate hike from the Fed on Wednesday, according to CME FedWatch. But with inflation pressures showing no signs of abating, market participants do not believe the central bank will be on hold for long.
Investors are also bracing for the Nov 3 midterm elections, which will decide control of the US Congress.
Advancing issues outnumbered decliners by a 1.36-to-1 ratio on the New York Stock Exchange and by a 1.09-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and seven new lows, while the Nasdaq Composite recorded 82 new highs and 349 new lows.
Volume on US exchanges was 16.7 billion shares, compared with the 17.2 billion average for the full session over the last 20 trading days.