On Monday, large-cap stocks experienced notable gains, driven by optimism over upcoming earnings results from key tech firms and a reduction in geopolitical tensions, propelling the Nasdaq Composite towards record levels. The S&P 500 rose 0.4%, while the Dow Jones Industrial Average advanced 320 points or 0.8%. The Nasdaq itself rose 0.6%.
One factor that helped to reduce market concerns was the targets of Israel's weekend air strikes on Iran: these were not oil or nuclear, as had been anticipated earlier. This clarification led to a massive fall in oil prices, as the U.S. crude fell by 6%, the same as Brent oil.
This week is crucial not only because it will mark the end of the third-quarter earnings season but also because it stands a little over the U.S. presidential election scheduled for November 5 and the Federal Open Market Committee meeting slated for November 7. Market focus is especially acute when it comes to the upcoming financial reports of five of the ‘Magnificent Seven' IT behemoths: Alphabet (GOOG, Financial), Microsoft (MSFT, Financial), Meta Platforms (META, Financial), Amazon (AMZN, Financial), and Apple (AAPL, Financial). In fact, Apple shares rose by 0.9% and Alphabet by 0.8% on the first day before their earnings disclosures.
Mike Dickson, head of research and quantitative strategies at Horizon Investments, highlighted the high stakes: “Because overall valuations still remain high, there has to be high attention paid to whether they are still going to achieve those growth rates.”
Many traders are paying close attention to several economic indicators scheduled to be released this week. These are the preliminary estimates of the third quarter GDP, September's personal consumption expenditures price index, and job market data. These figures will give additional information about the economic environment as business organizations release their earnings reports.
