Anthropic IPO filing sparks global AI rally ahead of Fed

Summary

Global markets rallied on Monday after Anthropic's blockbuster US IPO filing reignited enthusiasm for AI-related stocks, lifting the FTSE 100, Wall Street and risk sentiment broadly. The dollar firmed to a two-week high ahead of a packed week for central banks. The Federal Reserve will begin its two-day policy meeting today, with a decision due Wednesday alongside UK Chancellor John Healey's first budget.

Equities

The FTSE 100 closed 0.7% higher on Monday at 10,767 points, its strongest session in weeks, as Anthropic's blockbuster IPO filing lifted sentiment toward AI-linked stocks across global markets. The broader FTSE 250 jumped 1.09%, its biggest one-day gain since October 9. UK gilt yields eased to a one-month low ahead of Chancellor John Healey's first budget on Wednesday, which investors expect to prioritise bond-market stability.

Computacenter surged 13% to lead the FTSE 100's gainers after the technology services group raised its full-year profit forecast. Rolls-Royce and BAE Systems both climbed in a broader rebound across aerospace and defence shares. Energy stocks lagged as oil pulled back from last week's highs, with Shell and BP both slipping, while 3i Group rose after a portfolio company agreed to buy out a renewable-energy joint venture partner.

On Wall Street, the S&P 500 added 0.7% and the Nasdaq Composite rose 0.8% on Monday, while the Dow Jones Industrial Average edged up 0.3%. Anthropic's IPO disclosure, which revealed steep losses alongside rapid revenue growth, revived appetite for AI-related names after a recent selloff tied to concerns over debt-fuelled AI spending. Chipmaking and

AI-component suppliers such as Lumentum and Coherent were among the best performers, while Tesla jumped after Barclays upgraded the stock to "overweight" from "equal-weight."

Meta fell after the social media group unveiled plans to raise up to $95 billion in equity to fund its AI data-centre build-out, following similar mega-raises from Alphabet and SpaceX. More than a third of S&P 500 companies report earnings this week, including hyperscalers Alphabet, Microsoft and Amazon.

The Federal Reserve's two-day policy meeting will also get under way on Tuesday, with a decision due Wednesday that markets widely expect to leave rates on hold.

Forex & Commodities

The dollar index firmed to a two-week high near 102 on Tuesday, as the tech-led rebound on Wall Street revived risk appetite ahead of a historically busy week for central banks. The Federal Reserve, European Central Bank and Bank of Japan are all expected to hold rates this week, while New Zealand's and Canada's central banks are tipped to raise theirs. The euro slipped to a near two-week low against the dollar as a selloff in French government bonds, which pushed the country's borrowing costs to their highest since the 2011 debt crisis, weighed on the single currency.

The pound eased slightly against the dollar, tracking the broader greenback firmness rather than any fresh domestic catalyst. UK gilt yields slid to a one-month low as investors positioned ahead of Wednesday's budget, with data also showing shop-price inflation accelerated more than expected in October. Sterling traders are also watching for signs the Bank of England could follow last week's hotter-than-expected inflation reading with a rate hike of its own in November.

Spot gold eased toward $4,000 an ounce on Tuesday, weighed down by the firmer dollar as investors awaited Wednesday's Fed decision for fresh guidance on rates. The metal fell roughly 4% last week, its worst week in about four months, after higher energy prices stoked inflation concerns and reinforced expectations of further central bank tightening.

Traders are pricing in only an 11% chance of a hike this week but an 82% chance of one in December, which has limited gold's appeal as a hedge for now.

Brent crude and WTI both fell in early trading on Tuesday as diplomatic efforts to ease US-Iran hostilities, with Gulf mediators reportedly working to revive talks between Washington and Tehran, eased some of the risk premium built into prices last week. Brent pulled back further from last week's near six-month high, while WTI slipped similarly.

Oil remains close to multi-month highs overall, with Bank of America warning crude could still average around $120 a barrel in coming months should the Iran conflict flare up again.