Monday saw a strong showing on Wall Street, beginning an intense week that will feature a busy schedule of earnings releases, economic data, and the Fed's two-day monetary policy conference.
After a sell-off the week before, all three of the main US market indices ended the day higher than 1%. Apple Inc., Amazon.com, and Microsoft Corp. led the group of interest rate-sensitive megacap companies that provided the greatest upside power.
With 251 S&P 500 companies having released their third-quarter earnings, the third-quarter earnings season is well underway. LSEG reports that 78% of them have outperformed Wall Street forecasts.
Analysts now predict a 4.3% annual increase in S&P 500 earnings in the third quarter, which is a significant improvement above the 1.6% growth year over year observed at the start of October.
Oliver Pursche, senior vice president of Wealthspire Advisors in New York, said that investors are showing less pessimism, and the tone of the first and second quarter calls was more negative. There were concerns about interest rates, Federal policies, and a possible recession.
Among the most well-known businesses anticipated to release results this coming week are Caterpillar Inc., Pfizer Inc., Starbucks Corp., and Apple Inc.
The Federal Open Markets Committee will meet for a two-day meeting on monetary policy on Tuesday. The meeting's outcome is anticipated to reach a decision to maintain the Fed funds target rate between 5.25% and 5.50%.
Investors are waiting for hints about the Federal Reserve's future rate policy in the accompanying announcement and during Fed Chair's Q&A session.
According to Pursche, the Fed also wants to observe the overall effects of its rate hikes on the economy, but they also stated that they are ready to overshoot with great caution so long as inflation is over 3%.
The Bank of Japan and England will both announce rate decisions this week. The Bank of Japan is expected to review a further modification to its yield curve control framework.
The US Labor Department's employment report for October is coming on Friday, and this week will feature a plethora of much anticipated economic data.
The benchmark S&P 500 has dropped almost 10% from its intraday high in July due to geopolitical tension brought on by the Israel and Hamas conflict and an increase in Treasury yields. Equities have been negatively impacted in recent weeks.
The S&P 500 climbed 49.45 points to 4,166.82, the Nasdaq Composite rose 146.47 points to 12,789.48, and the Dow Jones Industrial Average increased 511.37 points to 32,928.96.
The S&P 500's eleven major sectors all finished the day higher than when they started, with communication services seeing the largest percentage increase at 2.1%.
McDonald's posted quarterly profits were better than anticipated, fueled by consumer demand for lower-priced food in the face of continuing inflationary pressures. Shares increased by 1.7%.
Following the chipmaker's low fourth-quarter sales prediction due to the declining demand for electric cars, Onsemi fell 21.8%.
Western Digital Corp. had a 7.3% increase in value on the announcement of its intention to split into two separate public companies.
After revealing that it would acquire Spirit Realty Capital in a $9.3 billion all-stock transaction, Realty Income fell 5.7%. Spirit Realty Capital saw a 7.9% increase.
On the New York Stock Exchange, advancers outnumbered falling ones by 2.15 to 1; on the Nasdaq, the ratio was 1.62-to-1 in favor of advancers.
44 new lows were reported by the S&P 500 without new 52-week highs, while the Nasdaq Composite saw 363 new lows and 14 new highs.
The total amount traded on US exchanges was 10.16 billion shares.