Markets
Chip Stocks Extend Rebound as Meta Slips on Record $97.5 Billion Share Sale
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The S&P 500 and Nasdaq edged higher in morning trading while the Dow lagged, with the Fed's two-day meeting underway.
By Emmanuel Cruz ·
Semiconductor shares pushed higher for a third straight session on Tuesday, giving the Nasdaq and the S&P 500 modest gains in the first hour of trading, while Meta Platforms fell after enlarging what is now its biggest-ever equity fundraising.
As of 9:57 a.m. ET, the S&P 500 was up 0.16% at 7,689.22 and the Nasdaq Composite was up 0.38% at 26,267.46, while the Dow Jones Industrial Average was down 0.14% at 52,287.66 [1]. Technology was the strongest of the 11 S&P 500 sectors and energy the weakest, with six sectors in positive territory [1]. The Philadelphia SE Semiconductor Index was up 1.8% at that point, adding to a rebound that followed several difficult weeks for chipmakers [1].
The outlier among the largest technology companies was Meta. Its shares were down 1.1% in early trading after the company raised its planned fundraising to $97.5 billion [1]. According to Reuters, the common stock portion grew to $25 billion from the $22.5 billion announced on Monday, priced at $625 per share, alongside 250 million depositary shares sold at $50 each [2]. Together the common and preferred offerings come to about $35 billion, and Meta also plans an at-the-market program of up to $60 billion that would begin after new non-voting Class C shares start trading, which is expected in the first quarter of 2027 [2].
The scale of the raise reflects how expensive the race to build artificial intelligence infrastructure has become. Reuters reported that Meta burned $2.12 billion in cash in the third quarter, its first negative free cash flow in more than a decade, and lifted the low end of its 2026 capital spending forecast to a range of $135 billion to $145 billion [2]. Analysts at William Blair wrote that investors are likely to keep questioning "the financing and potential for future capital raises" [2].
Chipmakers are on both sides of that spending. Nvidia said it will put $3 billion into the Meta offering, and Nvidia, AMD and Broadcom together have expressed interest in buying up to $5 billion of shares [2]. The Nvidia investment comes with a broader partnership on Meta's Muse family of AI models, under which Meta will expand its use of Nvidia systems, including Vera Rubin hardware [3]. Nvidia shares were flat before the opening bell, Invezz reported [3]. Such supplier-to-customer investments raise questions for some observers; Santa Clara University finance professor Devon Coombs told Invezz that investors need to judge how much revenue reflects independent customer demand [3].
Outside technology, earnings drove some of the larger moves. Royal Caribbean rose 6.5% after raising its full-year profit forecast, Boeing fell 1.8% after a wider-than-expected quarterly loss, and Sherwin-Williams dropped 3.4% after a profit miss that weighed on the Dow [1]. General Motors gained 5% after announcing plans to move its stock listing to Nasdaq [1].
The broader backdrop is the Federal Reserve's two-day meeting, which began on Tuesday with a decision due Wednesday. The central bank raised rates last month for the first time in three years, and CME FedWatch data showed less than a 10% chance of another hike this week, while odds of a December increase were around 80% [4]. Reuters reported that markets are pricing at least two more hikes by mid-2027 [1].
What comes next is a dense stretch of catalysts: the Fed statement and press conference on Wednesday, quarterly results from Alphabet, Microsoft and Amazon later this week, and the U.S. midterm elections on November 3 [1]. Those reports will be closely read for how much the largest AI spenders plan to invest, a question that the Meta raise has put squarely in front of investors.
Sources:
[1] Reuters via Kitco, "S&P 500, Nasdaq advance as oil eases ahead of Fed decision", October 27, 2026. https://www.kitco.com/news/off-the-wire/2026-10-27/sp-500-nasdaq-advance-oil-eases-ahead-fed-decision
[2] Reuters via Business Standard, "Meta eyes record $97.5 billion equity raise to fund AI infrastructure push", October 27, 2026. https://www.business-standard.com/world-news/meta-eyes-record-97-5-billion-equity-raise-to-fund-ai-infrastructure-push-126102700558_1.html
[3] Invezz, "Nvidia to invest $3B in Meta as AI spending drives $97.5B fundraising", October 27, 2026. https://invezz.com/news/2026/10/27/nvidia-to-invest-3b-in-meta-as-ai-spending-drives-97-5b-fundraising/
[4] Charles Schwab, "Stocks Extend Gains on Firm Earnings, Solid Tech", October 27, 2026. https://www.schwab.com/learn/story/stock-market-update-open
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.