Stocks Advance as Fed Holds Rates and AI Shares Rally

Global equities gained as investors weighed the Federal Reserve's decision to maintain interest rates against renewed enthusiasm for artificial intelligence and strong semiconductor earnings. On Wednesday, October 28, 2026, US markets traded modestly higher following the central bank's divided vote, while Asian shares rallied on technology sector optimism and exceptional results from South Korean chipmaker SK Hynix.

The Federal Reserve voted 10-2 to leave its benchmark interest rate unchanged despite persistent inflation pressures. Cleveland Fed President Beth Hammack and Fed Governor Lisa Cook dissented in favor of raising rates, highlighting divisions over the appropriate monetary policy response.

The Dow Jones Industrial Average rose approximately 0.1%, while the S&P 500 advanced 0.2% during Wednesday's session, according to Yahoo Finance. The Nasdaq Composite fluctuated near the unchanged level after posting gains in the preceding sessions.

Investors also monitored the possibility of another rate increase in December. CNBC reported on Tuesday that market expectations pointed toward a more restrictive policy outlook, with its account citing a 90% probability of a December hike according to CME FedWatch.

Technology shares benefited from renewed confidence in AI infrastructure spending. The previous Tuesday, the Nasdaq Composite climbed 1.18%, the S&P 500 gained 0.6%, and the Dow added 0.03%, according to Al Jazeera. Tesla rose 4.04%, Amazon gained 1.61%, Apple advanced 0.93%, and Alphabet increased 0.9%.

Nvidia rose nearly 1% after announcing a $3 billion investment in Meta's equity offering. Meta shares declined 1.64%, while Microsoft fell 0.24%. AI-related companies CoreWeave, Western Digital, and Advanced Micro Devices gained 7.94%, 6.95%, and 5.45%, respectively.

Dan Coatsworth, head of markets at AJ Bell in London, said the gains reflected continued investor interest in companies connected to AI infrastructure.

"A rally in a host of AI-related stocks including neocloud group CoreWeave, data storage specialist Western Digital and IT solutions provider Super Micro Computing implies that investors aren’t over the AI craze just yet," Coatsworth told Al Jazeera.

He described the performance of these shares as an indicator of broader market sentiment toward the technology sector.

"These types of stocks have become a litmus test for the mood of the market. They typically fall when investors are worried that the AI story might be running out of steam, and they rise when animal spirits are running high around the technological revolution," Coatsworth said.

He also highlighted uncertainty over whether the latest advances would develop into a sustained rally.

"The big unknown is whether this is the start of a new AI stock rally, or just a relief bounce after a period where investors were starting to question how long positive momentum could be sustained," he added.

Asian markets recorded stronger gains on Wednesday. South Korea's KOSPI surged 6.63%, Japan's Nikkei 225 rose 1.08%, and Taiwan's TAIEX advanced 2.04%. Hong Kong's Hang Seng Index was up 0.33% shortly before the market closed, according to Al Jazeera.

SK Hynix reported third-quarter operating profit of 83.33 trillion won, equivalent to $62.4 billion, representing an approximately 630% year-over-year increase, Al Jazeera reported. Its South Korean shares jumped 10.89% following the results. Yahoo Finance separately reported a 632% year-over-year increase in the company's profit.

Micron and Samsung shares also advanced as investors responded to stronger demand expectations for memory chips used in AI systems. Oracle shares climbed after the software and cloud computing company projected fiscal 2030 revenue of $225 billion, implying annual growth of 35%, according to Yahoo Finance.

Attention subsequently shifted to quarterly earnings from Microsoft and Alphabet, both scheduled to report after Wednesday's closing bell. Investors were looking for evidence that AI demand could justify the industry's substantial spending on computing infrastructure and data centers.

Microsoft had also offered voluntary buyouts to eligible employees in the United States, Canada, India, and the United Kingdom. CNBC reported that approximately 60,000 workers could qualify, representing about 27% of the company's 223,000 employees, as Microsoft seeks to balance AI infrastructure investment with operating efficiency.

Concerns about the scale of technology investment remained in focus following Anthropic's initial public offering filing on Monday. Al Jazeera reported that the AI company recorded $16.3 billion in revenue and a net loss of $80.7 billion during the first half of 2026. Gartner forecast global AI investment would reach $2.7 trillion in 2026 and $3.6 trillion in 2027.

Outside technology, energy markets faced additional pressure from geopolitical tensions. Brent crude futures exceeded $116 per barrel, rising nearly 2% amid continuing conflict in the Middle East, including hostilities involving Saudi Arabia and Yemen's Iran-aligned Houthis. Prices were more than 60% above levels recorded before the US-Israel war on Iran began, according to Al Jazeera.