Weekday edition
Meta stock slide, Cadence jump, and Brazil's election result
How analyst price targets are set, and why they often move after the news.
At Monday’s close: S&P 500 +0.70%, Nasdaq-100 +1.09%, Dow +0.28%
Meta slides after announcing stock sales to fund AI build-out
Meta Platforms (META) announced plans Monday to raise money by selling new stock to pay for its artificial intelligence infrastructure. Its shares slid 1.9%, losing $27 billion in market value. The broader S&P 500 rose 0.7%. The stock edged up 0.2% in after-hours trading.
The package pairs new common stock with mandatory convertible preferred shares, which must later turn into common stock. Meta also plans an at-the-market program, letting it sell shares gradually over time, potentially from the first quarter of 2027. New shares could dilute existing holders, shrinking each share's slice of the company. Chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) rose 2.4% and 2.8%.
For readers
What it means for you: Savers in S&P 500 index funds feel this plan in more than one place. Their funds hold Meta in proportion to its size. They also hold chipmakers such as Nvidia, valued at $5.2 trillion, which rose the same day. Inside a broad fund, those opposite moves can partly cancel out.
Read the full story, META price history and analyst ratings, AVGO price history and analyst ratings
Markets
Monday’s close
| Market | Level | Change |
|---|---|---|
| S&P 500 | 7,676.77 | +0.70% |
| Nasdaq-100 | 29,273.40 | +1.09% |
| Dow | 52,361.58 | +0.28% |
| 10-Yr | 5.00% | 0 bp |
| Bitcoin (24 hr)As of this edition | $79,727 | −0.48% |
The day ahead
Tuesday’s setup
The Federal Reserve's rate-setting committee opens its meeting today. The 10-year Treasury yield stands at 5.00% after a Monday when the S&P 500 rose 0.7%.
10:00 a.m. Conference Board Consumer Confidence Index, October. The survey tracks how households feel about jobs and business conditions; a weaker reading could hint at softer spending, while a stronger one may support company sales.
TBD Advance Report on Durable Goods--Manufacturers' Shipments, Inventories, and Orders, September. Orders for long-lasting goods such as machinery give a read on business investment; firmer orders could point to steady factory demand, while weaker ones may signal companies holding back.
TBD Fed rate-setting meeting begins. The committee begins its meeting, and its eventual decision could affect what savers earn on cash and what borrowers pay on loans and credit cards.
TBD New Residential Sales, September. Sales of newly built homes show housing demand; with the 10-year Treasury yield at 5.00%, a soft reading may reflect pressure from borrowing costs on buyers.
Today Boeing earnings. The quarterly report could give shareholders and customers an update on the company's finances and operations.
If you own
Celestica shares surged 16.8% in after-hours trading, with a last price of $246.65. Late trading is thin, so the move may not hold. The regular open could confirm it or shrink it.
Industrial stocks and funds rose 1.4%, an unusually large daily move for the group. Holders of industrial funds, which own factory, transport and aerospace companies, may see bigger day-to-day swings than they are used to.
Sector funds split widely. Technology rose 1.7%, and communication services slid 1.6%. Savers in a single-sector fund could have had a very different day from those in a broad index fund.
Tech funds could track the Nasdaq-100, which rose 1.1% to 29,273.40. A fund following the index added about $11 per $1,000 held. Moves that size may show up quickly in tech-heavy funds.
Need to know
Top stories
- 1
EWZ · −19.82% Brazil stock fund tumbles after Lula wins presidential run-off. The iShares MSCI Brazil ETF tumbled 19.8% on Monday after President Luiz Inácio Lula da Silva won Sunday's run-off election. Investors dropped bets on tighter fiscal policy, meaning government taxing and spending. Brazilian fintech Nu Holdings tumbled 17.0%. Analyst Andrés Abadía said restoring fiscal credibility will be the harder task. Brazilian assets could stay volatile while investors weigh the new government's spending plans. Read more
- 2
Health care · −3.21% Merck tumbles despite cancer drug survival gains in trials. Merck shares tumbled 3.2% on Monday, even after the drugmaker reported positive late-stage trial results. Its immunotherapy Keytruda and an experimental drug, sacituzumab tirumotecan, each showed significant survival gains in advanced endometrial cancer. Merck presented the data at a European cancer conference. The decline cost the company about $11 billion in market value. Read more
- 3
Cadence jumps after hours on earnings beat and higher outlook. Cadence Design Systems shares jumped 2.3% in after-hours trading on Monday. The maker of chip-design software beat analyst estimates for third-quarter revenue and profit. It also raised its full-year outlook. Cadence's tools help companies design semiconductors. Regular trading on Tuesday could show whether the after-hours gain holds. Read more
AI corner
Three changes that matter
Topics: Models, Markets
Anthropic files publicly to list its shares on the Nasdaq
The Claude maker's filing leaves the share count and price range blank, but the listing could test how public markets value AI model developers.
Topics: Deals, Chips
Banks commit financing for Broadcom AI chips leased to Anthropic
Bank of America, Blackstone, Citigroup and Morgan Stanley committed funds for a vehicle that would buy Broadcom chips and lease them to Anthropic.
Topics: Energy, Big Tech
Microsoft drops anchor deal for U.K. AI data center after grid delay
Microsoft said the change affects only the Essex site, but slow power connections could hold back cloud capacity and AI spending plans elsewhere.
How it works
Analyst price targets
A target is one opinion. A price target is one analyst's opinion of where a stock might trade about a year from now. Different firms can set very different targets. A change reflects that analyst's view, not anything new at the company. Today's story on Meta's plan to raise money by issuing new shares for its AI build-out is the kind of news that can lead analysts to revisit their targets. Target changes tend to cluster after earnings reports and big company announcements.
Coming up
Fed interest-rate decision. The Fed announces its rate decision, followed by the chair's press conference.
GDP, third quarter (advance estimate). The first estimate of how fast the economy grew last quarter.
Personal Income and Outlays, September. Household income and spending, with the PCE price index the Fed watches.
The close
The big picture. Spending on AI is still a main driver of markets. Technology funds gained Monday. Meta's plan to sell stock for its build-out weighed on communication services. Even after Monday's gains, the Nasdaq-100 has fallen 3.7% in October. The gains were broad: 59 percent of stocks rose. The 10-year Treasury yield was little changed at 5.00%, a level at which new bonds may offer savers steady income.
On the calendar. The government releases its early estimate of how fast the economy grew last quarter on Thursday, Oct. 29, 8:30 a.m. ET. Strong growth could support company earnings, but it could also keep pressure on the interest rates behind mortgage and loan costs.
Not investment advice.