Week in review: Meta's AI stock sale, Fed hike option, and index funds

Meta Platforms slides through the week after plan to sell new stock for AI

Breadth. 60.4% of the 915 most heavily traded U.S.-listed stocks rose this week.

The S&P 500, day by day

• Mon · Best day +0.70%
• Tue +0.60%
• Wed +0.28%
• Thu −0.30%
• Fri · Worst day −1.82%

Sectors this week

• Health care +3.12%
• Materials +2.79%
• Utilities +2.04%
• Consumer discretionary +2.02%
• Industrials +1.69%
• Real estate +1.41%
• Consumer staples +1.31%
• Financials +1.09%
• Energy +1.00%
• Technology −2.03%
• Communication services −5.32%

Biggest gains

• Insmed INSM +20.55%. Shares rose after the company raised its full-year sales forecast and quarterly sales beat estimates.

• Vertiv Holdings VRT +19.65% (+$14.70B in market value). The data center equipment maker reported its largest revenue beat as a public company, and orders rose.

• Carvana CVNA +18.13%. The company reported strong quarterly results and market-share gains and raised its outlook, reports said.

Biggest declines

• SERVICENOW NOW −33.87% (−$55.67B in market value). The software company's adjusted quarterly earnings fell short of forecasts, though revenue came in just above estimates.

• Alnylam Pharmaceuticals ALNY −26.35%. Analysts downgraded the drugmaker after its quarterly report, reports said.

• Intel INTC −24.38% (−$106.93B in market value). The chipmaker forecast fourth-quarter adjusted earnings well below analyst estimates.

• Index funds may have felt Alphabet's weight this week: its shares tumbled 12.6% and it lost $240 billion in market value, the biggest change among large U.S.-listed companies. The S&P 500 fell 0.6%; index funds hold Alphabet in proportion to its size, so a large company's slide may weigh on them.

• Bond funds may have gained a little ground this week, because bond prices move opposite to yields and the 10-year Treasury yield fell 6 basis points to 4.94%. Lower yields tend to lift the value of bonds the funds already hold, which may support their share prices.

• Gold funds may have disappointed holders this week, as a large fund that tracks gold tumbled 3.0% and has now fallen 10.2% this year. These funds tend to respond to real interest rates, meaning yields after inflation, and to the dollar, so changes in either could keep moving prices.

• Sector funds may have split sharply this week, as a health care fund surged 3.1%, the best result, while a communication services fund tumbled 5.3%, the worst. Owning a single industry may bring larger swings than a broad fund, in either direction.

1. 1

   Tue · Chips · +5.45% AMD ends week lower despite lift from Anthropic's IPO filing. AMD shares rose 5.5% on Tuesday after Anthropic, the maker of the Claude AI assistant, made its IPO prospectus public. The filing leaves the total computing bill blank, but reports describe commitments large enough to read as demand for chipmakers. The gain did not last. AMD tumbled 10.9% on Friday and slid 2.3% for the week. Scrutiny of AI spending could keep weighing on chip stocks.

2. 2

   Tue · Aerospace · −10.69% Boeing ends week lower after wider loss overshadows revenue beat. Boeing shares tumbled 10.7% on Tuesday after the planemaker reported a wider adjusted loss than analysts expected. Revenue beat estimates, and Boeing cited stronger cash flow and a record backlog of undelivered orders. The stock rose 3.3% on Thursday but fell 0.6% on Friday. It ended the week down 8.9%. Its chief executive said financial uncertainty is narrowing. Whether cash flow keeps improving could shape the shares from here.

3. 3

   Wed · Tech · +7.32% Federal Reserve holds rates and leaves December hike open. The Federal Reserve held interest rates steady on Wednesday, even though some officials voted for a hike. Chair Kevin Warsh declined to commit to a December increase. He said tighter financial and credit conditions since September are already doing some of the work. The hold leaves rates on most credit cards and home equity lines, which follow the prime rate, where they were. Officials meet again in December.

4. 4

   — Thu U.S. economy grows faster while stocks end the week lower. The U.S. economy grew faster in the third quarter, according to the government's advance estimate, an early reading of growth. Weekly jobless claims also edged down. Stocks still fell on Thursday, led by technology shares. An exchange-traded fund tracking the Dow slid 1.1% on Friday and fell 0.8% for the week. Later estimates may revise the growth figure. A firm job market may support household incomes.

5. 5

   Thu · Retail · −4.25% Amazon ends week lower after quarterly results miss estimates. Amazon reported third-quarter revenue and earnings per share below analyst estimates after the close on Thursday. The shares had already fallen 4.2% in that day's regular session. Growth at Amazon Web Services, its cloud computing arm, sped up, the company said. The stock slid 1.4% on Friday and fell 3.1% for the week. Alphabet also reported results below estimates on Wednesday. Both companies carry large weights in index funds.

• Topics: Regulation, Deals

  Nvidia faces Justice Department review of its Hugging Face purchase

  The Justice Department is examining whether the deal could give Nvidia control of a key AI distribution point, according to reports, which could delay or reshape it.

• Topics: Big Tech, Markets

  ServiceNow raises its AI sales target as its bookings outlook disappoints

  Slower bookings guidance outweighed a higher AI sales target, according to reports, a sign that AI wins alone may not be enough to lift software stocks.

• Topics: Deals, Chips

  Broadcom chief steps in to secure Anthropic chip financing as banks waver

  The deal reportedly closed only after lenders won higher borrowing costs and stronger protections, a sign that funding AI chips may be getting more expensive.

Index funds own every side. An index fund owns the stocks in a market index instead of picking among them. It holds each company in proportion to its size, so bigger companies carry more weight. Its return follows the index, minus a small yearly fee. In practice, the fund works like a mirror. When a company's market value grows, its share of the fund grows with it. When that value shrinks, its weight falls. A saver who buys the fund through a workplace retirement plan ends up owning a small piece of every company in the index. Gains in some holdings and losses in others land in the same account on the same day. They can partly offset each other. This week showed how that plays out. On Monday, Meta Platforms announced plans to sell new stock to pay for its artificial intelligence build-out, and its shares slid. The same day, chipmakers that could supply that build-out rose. Advanced Micro Devices jumped 2.8% and Broadcom jumped 2.3%. A broad index fund held Meta and those chipmakers together. Part of the loss in Meta was balanced by gains elsewhere in the fund. This tends to matter again whenever large U.S.-listed companies move in opposite directions on the same news. A big spending plan or a shift in demand can help some companies and hurt others. For an index fund holder, the net effect may depend on how much each company weighs in the fund.

Index fund in the glossary

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The big picture. The biggest companies set the week's direction. The S&P 500 fell 0.6% for the week but has gained 10.7% this year. Meta's plan to sell new stock for AI and Amazon's missed estimates weighed on large names, and communication services lost 5.3%. Beneath the indexes, the picture was broader: 60.4% of stocks rose over the week, led by health care. The 10-year Treasury yield fell 6 basis points to 4.94%, a modest help for bond funds.

Question of the week. The Fed held rates steady on Wednesday, and Chair Kevin Warsh declined to commit to a December hike. For fund holders, the hold left borrowing costs unchanged, and Treasury yields fell later in the week, which may have lifted bond funds slightly.

Tomorrow: The Week Ahead, on the October jobs report, September job openings and November consumer sentiment.