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28.10.2026 09:44 AM
Market buys tech narrative

The AI tech boom is back. The S&P 500 rose for a second day as positive headlines from tech leaders outweighed renewed strength in oil and Treasury yields — a repeat of the early?year dynamic that saw risk appetite hold after the initial shock of Middle East tensions. This time, even bad news around the US midterms and Fed hawkish talk about a December rate hike hasn't stopped the rally.

Bloomberg polling shows a Democratic win at the midterms would pressure the S&P 500. Yet history shows market sentiment often shifts after such political forecasts: investors first model a drop, then revise their views. So, don't overreact to headline political scenarios — the market's view can (and will) change.

Expected market capitalizations

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One clear tailwind for the S&P 500 is AI — the theme behind a five?year bull run. Anthropic's claim that it could reach a $40 trillion market cap if its IPO succeeds has energized buyers. That figure eclipses even SpaceX's jaw?dropping $28.5 trillion estimate.

2026 may well be a record year for IPO capital raising. Elon Musk's ventures have already pulled in $86 billion, and the Claude producer aims to push that total toward $100 billion. For context, the previous peak was 1999, when IPOs brought $65 billion into the market (about $133 billion in current dollars). That historical parallel inevitably raises the dot?com?era question: could an AI bubble burst too?

Russell 3000 and IPO index dynamics

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IPOs are not the best buying opportunities in many cases, because seller and buyer interests don't align at flotation. It's no surprise the IPO index lags the small?cap Russell 3000. Still, investors argue Anthropic's offering signals the AI boom still has life, and that institutional money will keep fueling the theme.

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NVIDIA keeps fuelling the fire. The chipmaker plans to inject $3 billion into new Meta stock issuance, effectively acting as a financing hub inside the AI ecosystem, providing capital to those who buy its chips.

Technically, the daily chart shows that the S&P 500 has returned to fair value around 7,725. A successful break above that level would justify adding to existing long positions. Conversely, a retreat from there would increase consolidation risk and reopen the case for trimming or selling the broad index.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2026
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