Wall Street closed higher on Tuesday 27 October, led by chip stocks, ahead of a Wednesday packed with the UK Budget at lunchtime, the Federal Reserve decision at 18:00 UK time, and Microsoft and Alphabet results after the US close. The Nasdaq Composite gained 1.18% to 26,477.81, the S&P 500 rose 0.6% to 7,722.60, and the Dow Jones Industrial Average edged up 0.03%, or 16 points, to 52,377.57.

A narrow, chip-led rally

The Philadelphia Semiconductor Index rose 3.6% after Broadcom's $63 billion financing deal tied to Anthropic, and the Russell 2000 gained 1.16% to 2,818.87. The CBOE Volatility Index fell 4.7% to about 17.52, and 16.1 billion shares traded, below the 20-session average of 17.18 billion. Breadth was narrow, however: six of the 11 S&P 500 sectors closed in negative territory, with technology carrying the headline gains, a reminder that index rises can hide weakness underneath.

Asia follows, big tests ahead

Asian markets rose overnight into Wednesday, with South Korea's KOSPI surging more than 6% after SK Hynix posted record results on AI memory demand, and Tokyo, Taipei and Shanghai also higher. Wednesday's three events will test whether the chip-led optimism survives contact with policy: the Budget's tax and spending choices, the Fed's rate signal, and earnings from two of the largest technology companies.

Sources: Zacks and Samuel & Co morning brief.