Chips power a three-day rally as the Fed and big tech loom

Good morning. The Nasdaq rose 1.14% to close at 26,467 last night and the S&P 500 gained 0.57%, helped by lower oil and strong chip stocks. Tech had its best three-day stretch in five weeks, and the relief from Anthropic's IPO filing on AI bubble worries spread to Asian chip stocks too, with the Nikkei up 1.7%.

The rally is narrow, though. The Dow finished barely above flat and the equal-weight index lagged, so a handful of mega-caps did the lifting. BofA noted that growth in margin debt, or borrowing to buy stocks, has slowed sharply, which in the past showed up ahead of market tops. Jim Cramer warned about the financing risks of data centers.

The Fed's decision lands tonight. In a CNBC survey, 93% of respondents expect a hold this time and 76% expect a hike in December. September CPI ran hot, but with the midterms a week away the bar for a surprise is high. Chair Warsh wants to avoid advance signals, while colleagues push him to explain how the Fed will respond.

Economic data came in firmer than expected. Consumer confidence rose for the first time in four months to 91.7, and September durable-goods orders rose, showing solid business investment. On the flip side, Coca-Cola, P&G and others signaled more price hikes next year because of Iran-war costs. Oil fell on hopes for U.S.-Iran talks, but supply risks remain, including the Houthis' claimed attack on a Saudi refinery.