US Stock Market Trends (Oct. 28): Oracle to Introduce Google TPUs, Boeing Delays 737 Production Increase

Written by: Trend Research

On Tuesday, chip and compute stocks continued their rebound, with the Nasdaq Composite rising 1.18% and the Philadelphia Semiconductor Index gaining 3.60%. Oracle expanded its partnership with Nvidia and announced it would offer Google TPU computing power on its cloud platform; Boeing plummeted due to delays in ramping up 737 production and weaker-than-expected cash flow prospects, dragging down the Dow Jones Industrial Average. The Federal Reserve's rate decision and earnings reports from Microsoft and Alphabet are scheduled for release early tomorrow, serving as a crucial test for this round of tech stock rally.

Nasdaq rises 1.18%, Philly Semi Index Sees Full Component Rise for Two Consecutive Days

On Tuesday, the S&P 500 rose 0.60% to close at 7,722.60 points; the Nasdaq Composite gained 1.18% to close at 26,477.81 points; the Dow Jones Industrial Average edged up 0.03% to finish at 52,377.57 points. The VIX fell 4.73% to 17.52.

That day, among the 11 S&P sector ETFs, Information Technology, Consumer Discretionary, Materials, Utilities, and Industrials rose, while Health Care, Financials, Communication Services, Real Estate, Consumer Staples, and Energy declined. Specifically, Information Technology gained 1.70%, while Energy fell 2.05%.

Among the Magnificent Seven, Tesla rose 4.04%, Amazon gained 1.61%, Alphabet Class A advanced 1.19%, Apple climbed 0.93%, and Nvidia ticked up 0.90%; Microsoft dipped 0.22%, and Meta fell 1.64%.

The Philadelphia Semiconductor Index rose 3.60%, marking its second consecutive session with all constituents closing higher. Credo surged 10.77%, Astera Labs jumped 10.47%, ON Semiconductor gained 6.22%, AMD advanced 5.45%, and Broadcom rose 4.00%.

Storage stocks continued their rebound, with Western Digital up 6.95%, SanDisk gaining 3.92%, Seagate climbing 3.67%, and Micron advancing 2.77%. Optoelectronics companies Coherent rose 6.45%, and Lumentum gained 5.88%. Compute cloud providers Nebius jumped 11.22%, and CoreWeave advanced 7.94%.

The NASDAQ Golden Dragon China Index dipped 0.11% to close at 5,501.01 points. JD.com rose 1.31%, Futu gained 1.01%, and Baidu advanced 0.54%; NetEase fell 3.58%, Bilibili dropped 1.72%, and Alibaba was essentially flat.

In the late New York bond market, the yield on the 10-year U.S. Treasury was approximately 4.98%, and the 2-year stood around 4.73%. Spot gold rose about 1.1% to roughly $4,061 per ounce. At press time this morning, Bitcoin traded around $80,700, and Ethereum hovered near $2,345.

Oracle Adds Chip Options, Google TPU Set to Launch Next Year

Oracle and Google announced that Google TPUs will be offered to customers via Oracle Cloud Infrastructure (OCI), with deployments expected to begin in 2027 and gradually scale over the following years. OCI will become the first hyperscale cloud platform other than Google to provide TPUs.

The TPU is a custom-built AI accelerator developed by Google, designed for model training and inference. Oracle will supply data centers, power, cooling, and networking infrastructure, enabling customers to choose from different chips on the existing cloud platform.

Oracle is also expanding its Nvidia compute deployment, planning to adopt the Vera Rubin system and scaling the partnership to the multi-gigawatt level. Additionally, the company will introduce inference chips from Cerebras and SambaNova.

This is not a complete replacement of Nvidia chips with Google's offerings, but rather an expansion of GPU deployments alongside added alternatives. As AI shifts from training to large-scale application, customers care more about response times, throughput, and usage costs across different workloads, prompting cloud providers to offer more architectural choices.

Boeing Drops 10.69%, 737 Production Ramp and Cash Flow Recovery Delayed

Boeing closed down 10.69% on Tuesday, becoming one of the main drags on the Dow Jones Industrial Average.

The company reported third-quarter revenue of approximately $24.19 billion, representing a year-over-year increase of roughly 4%; net loss narrowed significantly to $116 million compared to the same period last year. However, adjusted EPS of -$0.34 still fell short of market expectations.

Production and cash flow plans disappointed investors further. Boeing postponed its goal of producing 47 737 aircraft per month to early 2027, stating it will miss its target to deliver approximately 500 737 jets this year, with wing production remaining a bottleneck.

The company projected free cash flow for 2027 to be around $3 billion, below earlier market expectations of roughly $5.5 billion; the timeline for achieving annual free cash flow of $10 billion has been pushed back to 2029.

Seagate Revenue Surges 61%, Shares Pull Back Despite Earnings Beat

After hours on Tuesday, Seagate reported Q1 FY2027 results. Revenue came in at $4.233 billion, up approximately 61% year over year; adjusted EPS reached $7.68, both beating market expectations.

Non-GAAP gross margin expanded to 57.8%, and free cash flow hit $1.479 billion. While revenue grew, cost increases remained relatively contained, driving improved profitability.

Seagate forecasted next quarter's revenue between $4.7 billion and $4.9 billion, with adjusted EPS of $9.00 to $9.40, and raised its quarterly dividend to $0.76 per share.

The company continues to advance heat-assisted magnetic recording technology to increase single-drive capacity, meeting the massive storage demands of data centers. Nevertheless, the earnings and guidance beat did not trigger after-hours gains: Seagate closed up 3.67% during regular trading, but shares pulled back more than 8% following the earnings release.

US Crude Breaks Below $100, Energy Stocks Slide

On Tuesday, WTI December crude futures fell 1.83% to close at $99.90 per barrel; Brent December crude contracted 1.67% to finish at $113.88 per barrel.

Diplomatic outreach in the Middle East continues, pushing oil prices lower for a second consecutive session. News of Houthi attacks on Saudi energy facilities triggered intraday rallies, but failed to reverse the closing declines, with specific damage and supply impacts awaiting confirmation.

Refiners suffered heavier losses, with Valero Energy dropping 9.24%, Marathon Petroleum falling 7.36%, and Phillips 66 slipping 7.03%.

Today's Watch

All times are in Beijing Standard Time.

2:00 AM, October 29: Fed rate decision, chair press conference at 2:30 AM. Markets generally expect rates to remain unchanged, making the Fed's stance on inflation, financial conditions, and December policy the key focus.

After U.S. market close on October 29: Microsoft and Alphabet report earnings. Key metrics for Microsoft include Azure growth and AI service revenue, while Alphabet’s focus lies on cloud business, search advertising, and capital expenditures. Whether these two tech giants can demonstrate that revenue growth keeps pace with investments will shape the future performance of chip and compute stocks.