In the wake of a challenging period for the stock market, US stocks rallied on Monday as investors anticipated significant events on the horizon, including the Federal Reserve’s policy decision and Apple’s earnings report.
The benchmark S&P 500 (^GSPC) experienced a 1.2% climb at the closing bell, marking a rebound after officially entering correction territory. Meanwhile, the Dow Jones Industrial Average (^DJI) saw a substantial increase of about 1.6%, equivalent to more than 500 points, following a 1.2% drop in its previous close.
The tech-heavy Nasdaq Composite (^IXIC) also showed strength, ending the day with an approximately 1.2% gain. This positive momentum comes after a challenging week influenced by mixed results in Big Tech earnings.
Investor attention is now focused on the US central bank and Apple, the largest company on the S&P 500, as they hold the potential to boost market spirits following several demanding months. Additionally, the forthcoming US jobs report for October, scheduled for Friday, is closely watched.
Expectations of the Federal Reserve maintaining its “higher for longer” stance and keeping interest rates steady in their upcoming decision on Wednesday have risen due to an increase in the Fed’s preferred inflation metric.
Apple is set to reveal its quarterly results on Thursday after the market’s close, with particular interest in the potential impact of China’s efforts to restrict the use of iPhones.
Furthermore, investors are analyzing McDonald’s earnings released on Monday to gauge the resilience of the US consumer, who has withstood elevated borrowing costs. The fast-food giant surpassed earnings estimates for the third quarter, with increased menu prices contributing to sales growth.
In the commodities market, benchmark oil prices witnessed a decline as Israel’s measured approach in its campaign in Gaza eased concerns of escalating conflict in the Middle East. This development encouraged investors to reenter the markets. West Texas Intermediate futures (CL=F) dropped by approximately 3.6% to reach $82.50 a barrel, while Brent futures (BZ=F) shed roughly 3%, trading at around $87.84 a barrel.
