Large-caps waver ahead of next week’s Fed meeting; small-caps notch record close

The S&P 500 closed slightly higher and the Nasdaq 100 closed slightly down, but small-caps continued to rally, with the Russell 2000 notching a new record close. Hopes of a rate cut at next week’s Fed meeting remain high, despite jobless claims falling to a three-year low. Tomorrow’s delayed release of September personal consumption expenditures, the Fed’s preferred inflation gauge, could impact rate cut expectations.

Stocks that moved higher:

• Quantum computing companies IonQ, Rigetti Computing, and D-Wave Quantum were buoyed by a wave of bullish options activity.

• AI-linked energy plays also benefited from an explosion of call buying, as Oklo, NuScale, and Bloom Energy soared.

• Nvidia was unfazed by US senators’ plan to introduce a bill blocking it from selling H200 and Blackwell chips to China for 30 months.

• Meta surged after a report that the social media giant will slash metaverse spending by up to 30%.

• Hims & Hers spiked after it announced its acquisition of Livewell, a Canadian telehealth company, marking its official entrance to that market.

• Salesforce rose after reporting higher-than-expected earnings and guidance after the bell yesterday.

• Space stocks AST SpaceMobile, Planet Labs, and Rocket Lab all soared amid a recovery in the high-beta momentum class of shares coveted by some retail traders.

Stocks that moved lower:

• Intel fell after reversing plans to divest its networking division.

• Netflix dipped amid reports it’s leading the Warner Bros. Discovery bidding war as Paramount Skydance cried foul.

• Snowflake sank after the cloud company gave an operating margin outlook that fell short of analyst expectations, reflecting investors’ worries about the profitability of new AI-based products.

• Symbiotic tanked as the robotics company and SoftBank, Symbiotic’s largest shareholder, announced an offering of 10 million shares.