Boeing plummets 10.7%, but Chip stocks lift S&P 500 on Broadcom deal

U.S. stocks rose for a second straight day Tuesday as chipmakers extended a rally that began with Anthropic’s IPO filing Monday. The S&P 500 gained 0.6% to 7,722.60, within 1.2% of its record. The Nasdaq Composite rose 1.2% to 26,477.81, and the Russell 2000 rose 1.2% to 2,818.87.

Boeing’s 10.7% plunge held the Dow Jones Industrial Average to a 16-point gain at 52,377.57. Broadcom led chips after Bank of America, Blackstone, Citigroup and Morgan Stanley said late Monday they had arranged $63 billion to buy Broadcom gear to lease to Anthropic. The size of the financing deal was no surprise, since Bloomberg reported a roughly $60 billion package taking shape in early October. But stocks rose again after the announcement of a signed, completed deal.

Oil prices slipped as well, putting a drag on energy stocks but bouying equities in general.

Rounding up the major ETFs, the State Street SPDR S&P 500 ETF, ASPY, rose 0.6%. The Invesco AQQQ Trust, Series 1, AQQQ, which tracks the Nasdaq-100, rose 1.3%, and BlackRock's iShares Russell 2000 ETF, BIWM, rose 1.1%. The State Street SPDR Dow Jones Industrial Average ETF Trust, ADIA, added 0.05%.

The Broadcom financing deal

Bank of America, Blackstone, Citigroup and Morgan Stanley announced Monday afternoon that they had inked a deal to finance $63 billion of Broadcom equipment to lease to AI giant Anthropic.

A newly formed special purpose vehicle will buy Broadcom XPU AI accelerators and networking equipment. Deliveries are expected to start in 2027 under a compute agreement Broadcom announced earlier.

Bank of America, Citigroup and Morgan Stanley are arranging the first-lien, or senior, debt. Blackstone is the sole provider of the committed portion of the second-lien, or junior, debt. Broadcom will provide residual value support, a backstop tied to the hardware’s future value, in an amount equal to the first-lien debt. The release did not provide the size of each tranches. However, Reuters, citing two sources, put the first-lien loans at about $43.5 billion, or 69% of the total.

Jon Gray, Blackstone's president and chief operating officer, said the rapidly growing demand for AI "is creating an enormous opportunity to finance compute capacity at scale."

Broadcom rose 4% to $342.33. Advanced Micro Devices rose 5.5%, Micron rose 2.8%, and Nvidia rose 0.9%. The VanEck Semiconductor ETF, ASMH, rose 3%.

The State Street Technology Select Sector SPDR ETF, AXLK, rose 1.7%, a third straight gain and the best of the 11 SPDR sector funds. Six of those 11 fell.

Most funds rose anyway: 4,081 U.S.-listed ETFs closed higher, and 1,391 closed lower.

Boeing falls 10.7% after missing 737 targets and cutting free cash flow outlook

Boeing fell 10.7% to $168.18.

Reuters reported that the drop was the worst day in more than 18 months, after Chief Executive Kelly Ortberg said the company will miss this year's 737 production and jet delivery targets. Reuters also reported that Boeing expects $3 billion of free cash flow next year, against a $5.5 billion analyst consensus compiled by the London Stock Exchange Group, and that a $10 billion free-cash-flow target has moved to 2029, a year later than that consensus.

The same report said Boeing now expects to reach 47 jets a month in early 2027, after executives said in May they would get there this summer. Ortberg told CNBC the company is targeting 52 planes a month only in the second half of 2027, with wing production still slow.

"I know everybody wants us to go faster, but we're going to do it right," Ortberg told CNBC.

Inside ADIA, Boeing's drop subtracted 0.23 percentage points, about what Caterpillar's 3.1% rise added. Goldman Sachs rose 2.1% and added 0.21 more, and the fund still finished only 0.05% higher.

Oil falls on diplomacy hopes

The State Street Energy Select Sector SPDR ETF (AXLE) fell 2%, the worst of the 11 sector funds. December West Texas Intermediate crude settled down $1.86, or 1.8%, at $99.90 a barrel (as of 2026-10-27), back below $100. Brent, the international benchmark, settled down 1.7% at $113.88. It was crude’s second straight decline, which CNBC attributed to renewed diplomacy aimed at ending the U.S.-Israeli war with Iran.

Fed expected to hold Wednesday, with a December hike likely

The Federal Open Market Committee began a two-day meeting Tuesday and will announce its interest rate decision at 2 p.m. ET Wednesday.

Fed Chair Kevin Warsh holds a news conference at 2:30 p.m. The federal funds rate stands at 3.75% to 4% after a quarter-point hike in September, and futures priced about a 93% chance of a hold, according to CME FedWatch data cited by CNBC. A CNBC survey of 30 fund managers, strategists and economists, published Tuesday, found 93% expect a pause this week and 76% expect a hike at the Dec. 8-9 meeting. Thirty percent said the Fed should raise rates now.

Richard Bernstein, global head of macro and customized investing at Janus Henderson Investors, called the Fed’s hesitancy “unfathomable,” with nominal GDP growing 6% to 8%. Mark Zandi, chief economist at Moody’s Analytics, cited an intensifying Iran war, falling real wages and a shaky AI-driven stock market. “This isn’t the time for more Fed rate hikes,” Zandi wrote.

Beyond the Fed, three of the Magnificent Seven report earnings Wednesday and Thursday, and the PCE inflation index, the Fed’s preferred inflation gauge, is due Thursday.

A CNBC survey of 30 fund managers, strategists and economists, published Tuesday morning, found that 93% expect a pause this week. 76% expect an increase in December, at the meeting after this one.