[October 27, 2026] Tech stocks rebound on major AI-related IPO filings and massive funding
Good morning, this is Hal.
In the U.S. stock market yesterday, October 27, 2026, skepticism regarding AI investment that had blanketed the market until last week eased, leading to widespread buying of tech and semiconductor-related stocks. As a result, both the NASDAQ Composite and the S&P 500 closed the trading session higher.
The market was strongly pushed upward by the announcement of a historic initial public offering (IPO) filing by a generative AI development company and massive funding agreements for AI infrastructure, which reaffirmed the strength of AI demand.
On the other hand, the Dow Jones Industrial Average saw only a modest gain, weighed down by poor earnings reports from some capital goods manufacturers.
Today’s Market Overview
Tech stocks were bought on the reaffirmation of AI infrastructure demand, lifting the NASDAQ and S&P 500, while the Dow remained only slightly higher as earnings results showed a mix of winners and losers.
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S&P 500 Index: 7,722.60 (+45.83 / +0.60%)
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Dow Jones Industrial Average: 52,377.57 (+15.99 / +0.03%)
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NASDAQ Composite Index: 26,477.81 (+308.43 / +1.18%)
The “Three Protagonists” That Moved the Market
The following three factors were the main drivers that improved market sentiment yesterday and determined the direction of the market.
Reignition of investment themes through large-scale AI-related IPOs and funding agreements
A large-scale IPO filing by a generative AI company and a massive AI infrastructure funding agreement brokered by a major semiconductor firm were announced. With the confirmation of robust demand for AI and the inflow of capital, the pessimism of the previous week receded, and the semiconductor stock index rebounded significantly.
Pricing power and the divide in Q3 earnings
While logistics and travel-related companies reported strong earnings due to price hikes and efficiency improvements, leading to stock price gains, manufacturing and housing-related companies saw demand slump due to high interest rates and inflation, leading to downward revisions and sharp stock price drops.
Rebound in crude oil prices and interest rate stabilization following reports of Middle East peace negotiations
Expectations for progress in Middle East peace negotiations led to a decline in crude oil prices, easing inflation concerns. This kept the U.S. 10-year Treasury yield below 5%, acting as a factor to alleviate the sense of overvaluation in the stock market as a whole.
Hal’s Perspective: The resurgence of tech stocks due to interest rate stabilization and performance gaps between sectors
Today, I will explain the impact of the decline in long-term interest rates and the differences between sectors that have become clear in the earnings announcements.
Tech stocks surge on lower interest rates and confirmed AI demand: The information technology sector saw the largest gains as the U.S. 10-year Treasury yield stabilized around 4.99% and capital inflows into AI were confirmed. For tech stocks, where future earnings are anticipated, lower interest rates are a strong tailwind.
Pullback in capital goods and energy weighed down by high interest rates: Meanwhile, although long-term interest rates have fallen, their absolute levels remain high, suppressing capital investment and housing demand, which is negatively impacting earnings in sectors such as capital goods. Additionally, the energy sector saw the largest decline following a drop in crude oil prices.
Stocks to watch: Stocks bought for strong earnings or AI relevance, and stocks sold due to slowing demand or rising costs
[Gainers]
Third-quarter earnings exceeded market expectations, and the company was well-received for raising delivery prices and achieving cost-cutting effects, leading to an upward revision of its full-year earnings guidance for the second consecutive quarter.
Earnings beat expectations against the backdrop of strong summer cruise travel demand, and the company raised its full-year profit guidance, confirming the strength of leisure spending and attracting buying interest.
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Broadcom (AVGO): +3.99%
The company rose after securing a $63 billion funding deal for AI startups, which was viewed as confirming long-term demand for its AI-focused semiconductors.
[Losers]
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Xylem (XYL): -14.20%
Third-quarter sales and earnings missed expectations, and the company faced a wave of disappointment selling after lowering its full-year earnings guidance due to factors such as delays in smart meter replacements by utility companies.
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Boeing (BA): -10.68%
The company’s ongoing production delay issues for commercial aircraft have persisted, and the fact that the loss per share was significantly larger than market expectations was poorly received, weighing on the Dow Jones Industrial Average.
The stock was sold after the company expressed a cautious outlook, citing declining paint demand due to the slump in housing transactions caused by high mortgage rates, as well as rising raw material costs putting pressure on profits.
Outlook: Focus on Big Tech earnings and the FOMC
The current U.S. stock market is seeing a polarization where expectations for investment in AI infrastructure support the market, while high interest rates put pressure on the performance of traditional companies.
Moving forward, as earnings announcements from major IT companies like Microsoft and Alphabet continue, the main focus will be on whether they are generating revenue commensurate with their massive AI investments. Additionally, I believe it is important to maintain a calm stance in assessing the future of inflation and interest rates through the monetary policy announcements from the FOMC (Federal Open Market Committee).
That’s all from Hal.
Important Request
This article is intended for informational purposes regarding U.S. stocks and does not constitute a recommendation to buy or sell any specific securities. Please make all final investment decisions based on your own judgment and responsibility.