Broadcom–Microsoft chip talks, IBM’s $11B Confluent deal, and a hostile bid for Warner Bros. Discovery add momentum to a market betting on a Fed rate cut.
The Nasdaq Composite edged higher on Monday as investors positioned themselves ahead of a pivotal Federal Reserve meeting later this week. The tech-heavy index gained 0.3%, supported by strength in semiconductor and software stocks, while the S&P 500 hovered near the flatline. The Dow Jones Industrial Average lagged, declining 168 points, or 0.4%.
Tech stocks led the market’s modest advance. Broadcom (AVGO) shares rose 3% following a report from The Information that Microsoft is exploring a partnership with the chipmaker to design custom processors—another sign of Big Tech’s accelerating investments in AI infrastructure. Meanwhile, Confluent soared 28% after IBM (IBM) announced an $11 billion acquisition deal expected to close by mid-2026, signaling renewed appetite for strategic software M&A. Oracle, set to report quarterly earnings Wednesday, climbed 2% amid growing investor optimism.
Monday’s action follows two consecutive positive weeks for major U.S. indexes. The Dow and Nasdaq advanced 0.5% and 0.9% last week, while the S&P 500 rose 0.3%, bringing it within 0.7% of its all-time intraday high. The Nasdaq and S&P 500 each logged four-day winning streaks, reflecting broad market resilience.
Friday’s release of September’s core personal consumption expenditures (PCE) index—a key inflation gauge—came in softer than expected, bolstering hopes for monetary easing. With inflation cooling and economic data stabilizing, traders now assign a roughly 90% probability that the Fed will lower interest rates during this week’s Federal Open Market Committee (FOMC) meeting, up sharply from 67% a month ago, according to CME’s FedWatch tool.
“Markets are appropriately focused on an interest rate cut or hold,” said Eric Freedman, CIO of Northern Trust Wealth Management, but he noted investors are equally attuned to the Fed’s messaging on future leadership and policy direction.
Adding to the day’s corporate drama, Paramount Skydance launched a hostile bid to acquire Warner Bros. Discovery after losing out to Netflix in a previous bidding war for its assets. The all-cash $30-per-share offer—supported by billions in equity and debt financing—marks a bold move by CEO David Ellison. “We’re really here to finish what we started,” Ellison said, emphasizing that Paramount is taking its proposal directly to shareholders.
As markets await the Fed’s final decision of the year, strong tech momentum, renewed deal-making, and improving inflation dynamics continue to support a cautiously optimistic backdrop heading into year-end.
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