US Stock Market Trends (October 28): Oracle to Introduce Google TPUs; Boeing Delays 737 Production Ramp-Up

Written by: Tide Direction Research

On Tuesday, chip and compute stocks continued to 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 will offer Google TPU compute on its cloud platform; Boeing fell sharply on delays to the 737 production ramp-up and a cash-flow outlook below expectations, weighing on the Dow. The Federal Reserve decision and earnings from Microsoft and Alphabet are set to be released one after another early tomorrow morning, a key test for this tech-stock rebound.

Nasdaq rises 1.18%, Philadelphia Semiconductor Index closes higher with all constituents up for second straight day

On Tuesday, the S&P 500 rose 0.60% to close at 7722.60; the Nasdaq Composite rose 1.18% to close at 26477.81; the Dow rose 0.03% to close at 52377.57. 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 fell. Among them, Information Technology rose 1.70% and Energy fell 2.05%.

Among the Magnificent Seven, Tesla rose 4.04%, Amazon rose 1.61%, Alphabet A rose 1.19%, Apple rose 0.93% and Nvidia rose 0.90%; Microsoft fell 0.22% and Meta fell 1.64%.

The Philadelphia Semiconductor Index rose 3.60%, with all constituents closing higher for the second consecutive trading day. Credo rose 10.77%, Astera Labs rose 10.47%, onsemi rose 6.22%, AMD rose 5.45% and Broadcom rose 4.00%.

Storage stocks extended the rebound, with Western Digital rising 6.95%, SanDisk rising 3.92%, Seagate rising 3.67% and Micron rising 2.77%. Optical communications company Coherent rose 6.45% and Lumentum rose 5.88%. AI compute cloud providers Nebius rose 11.22% and CoreWeave rose 7.94%.

The Nasdaq Golden Dragon China Index fell 0.11% to close at 5501.01. JD.com rose 1.31%, Futu rose 1.01% and Baidu rose 0.54%; NetEase fell 3.58%, Bilibili fell 1.72% and Alibaba was roughly flat.

Late in New York bond trading, the 10-year US Treasury yield was about 4.98% and the 2-year yield was about 4.73%. Spot gold rose about 1.1% to about $4061 per ounce. As of this morning's editorial check, Bitcoin was about $80,700 and Ethereum was about $2345.

Oracle adds chip options; Google TPUs to go live next year

Oracle and Google announced that Google TPUs will be offered to customers through Oracle Cloud Infrastructure OCI, with deployment expected to begin in 2027 and scale up gradually over subsequent years. OCI will become the first hyperscale cloud platform other than Google to offer TPUs.

TPUs are Google's proprietary AI accelerator chips, which can be used for model training and inference. Oracle will provide data centers, power, cooling and networking facilities, allowing customers to choose different chips on existing cloud platforms.

Oracle is also expanding its Nvidia compute deployments, planning to adopt Vera Rubin systems and scaling the partnership to multi-gigawatt levels. In addition, the company will introduce inference chips from Cerebras and SambaNova.

This is not a wholesale replacement of Nvidia with Google chips, but an expansion of options alongside growing GPU deployments. As AI moves from training to large-scale applications, customers increasingly care about response speed, throughput and usage cost for different tasks, and cloud providers are beginning to offer more architectures.

Boeing falls 10.69%; 737 production ramp-up and cash-flow recovery delayed

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

The company's third-quarter revenue was about $24.19 billion, up about 4% year over year; net loss was $116 million, narrowing significantly from the same period last year. However, adjusted loss per share of $0.34 still missed market expectations.

What disappointed investors more were the production and cash-flow arrangements. Boeing pushed its target of producing 47 737-series aircraft per month to early 2027 and said it will not meet its delivery target of about 500 737 aircraft this year, with wing production remaining a bottleneck.

The company expects 2027 free cash flow of about $3 billion, below the prior market expectation of about $5.5 billion; the timeline for annual free cash flow to reach $10 billion has been pushed back to 2029.

Seagate revenue rises 61%, but shares still pull back after earnings

Tuesday after the close, Seagate reported first-quarter fiscal 2027 results. Revenue was $4.233 billion, up about 61% year over year; adjusted earnings per share was $7.68, both above market expectations.

The company's non-GAAP gross margin rose to 57.8%, and free cash flow reached $1.479 billion. Revenue growth was accompanied by relatively limited cost increases, driving margin improvement.

Seagate expects next-quarter revenue of $4.7 billion to $4.9 billion, adjusted earnings per share of $9.00 to $9.40, and will raise its quarterly dividend to $0.76 per share.

The company continues to advance heat-assisted magnetic recording technology to increase per-drive capacity and meet data centers' high-capacity storage demand. However, better-than-expected results and guidance did not translate into an after-hours gain: Seagate closed regular trading up 3.67%, and the stock briefly fell more than 8% after the earnings report.

US crude falls below $100, energy stocks slide

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

Middle East diplomatic engagement continued to progress, and oil prices fell for a second straight trading day. News of Houthi attacks on Saudi energy facilities briefly lifted oil prices intraday, but did not reverse the closing decline; specific damage and supply impacts remain to be confirmed.

Refiners saw larger declines: Valero Energy fell 9.24%, Marathon Oil fell 7.36%, and Phillips 66 fell 7.03%.

Today's Focus

All times below are Beijing time.

Oct. 29 at 2:00 a.m.: Federal Reserve rate decision, followed by a Fed Chair press conference at 2:30.The market widely expects rates to remain unchanged this time; more noteworthy are the Fed's comments on inflation, financial conditions, and December policy.

In the early hours of Oct. 29, after the U.S. market close: Microsoft and Alphabet report earnings.For Microsoft, focus will be on Azure growth and AI services revenue; for Alphabet, focus will be on cloud business, search advertising, and capital expenditures. Whether the two companies can demonstrate that revenue growth is keeping pace with spending will affect the subsequent performance of chip and compute stocks.

Source: TechFlow