Stock Market Today: Stocks End Higher With Mid-Terms, Inflation Data In Focus
Updated at 04:15 pm EST
U.S. Stocks ended the day higher ahead of U.S. mid-term elections and inflation data due later this week.
The Dow Jones Industrial Average ended up 1.3% at 32,827. The S&P 500 and Nasdaq Composite indexes both finished up 0.9%.
Updated at 11:59 am EST
U.S. stocks moved higher Monday, while the dollar slipped lower against its global peers and Treasury bond yield eased, as investors peered into another key week for domestic markets amid questions over the Federal Reserve's appetite for prolonged rate hikes.
Modestly easing wage pressures in last week's October jobs report, alongside the seemingly dovish Fed statement that followed its fourth 75 basis point rate hike last week, has given rise to at least some suggestion that the Fed will begin slowing the pace of its planned rate hikes starting next month.
Fed Chair Powell did his best to tame those expectations last week, however, insisting it was 'premature' to talk about a change in tact, but with traders noting the stark difference in his comments from the agreed statement, markets are likely to focus on the seven Fed officials slated to make public speeches this week for clarification on the central bank's messaging.
The need for clarity is even more important now that the third quarter earnings season in drawing to a close, and investors are growing increasingly concerned over the market's ability to sustain its short-lived October rally into the final months of the year.
Bank of America's closely tracked 'Flow Show' report suggests fund mangers are moving into cash at the fastest rate since the pandemic, with $62.1 billion of inflow last week, while data from Refinitv suggest fourth quarter earnings will likely decline by 0.4% from last year to a share-weighted $459.6 billion.
With just over 85% of the S&P 500 reporting for the October quarter, earnings are likely to grow 4.3% from last year to $464.1 billion, but stripping away the energy sector cuts that rate to -3.4%.
Mid-term elections and inflation data will form the focus for market direction this week as investors continue to pick through clues as to when, or indeed how, the Federal Reserve will conclude its relentless series of rate hikes.
Polls suggest the increasing chance of a Republican sweep in both the House and the Senate on Tuesday, with key races in Georgia potentially allowing the GOP to hold control of the upper chamber for a fourth consecutive Congress. That composition would likely thwart any fiscal agenda put forward by President Joe Biden over this final two years in office, and possibly remove a key market risk that deeper fiscal spending from the Democrats would further accelerate inflation pressures.
On that front, key CPI data for October, set to be released at 8:30 am Thursday, is likely to show at least a modest easing in headline inflation on an annual basis, although higher gas prices will lift the month-on-month reading to 0.7%. Big declines in used car prices will clip the core component to around 0.5%, according to forecasts.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.24% lower at 110.605 while benchmark 10-year note yields eased to 4.141%.
In the meantime, China's decision to double-down on its 'zero Covid' health policies continues to take its toll on both the region's broader economy and supply chains brining products into the United States. China, in fact, posted the first simultaneous decline in both exports and imports in more than two years last month, while Apple (AAPL) - Get Free Report warned that Covid restrictions at a key factory in Zhengzhou would affect high-end iPhone shipments over the holiday quarter.
Heading into early afternoon trading on Wall Street, the S&P 500 was marked 2 points higher while the Dow Jones Industrial Average gained 156 points.
The tech-focused Nasdaq initially fell 30 points, thanks in part to a 1.4% decline for Apple (AAPL) - Get Free Report after the iPhone maker warned that Covid restrictions at a key plant in China would curtail shipments of its higher-end handsets heading into the holiday season. Shares recovered to end the day slightly higher.
Meta Platforms (META) - Get Free Report shares were also on the move, ending up 6.5% following a weekend report from the Wall Street Journal that suggested the social media group is planning to unveil 'large scale' layoffs over the coming days.
In overseas markets, China stocks booked modest gains on hopes that weakening trade data will elicit a policy response from Beijing, with the region-wide MSCI ex-Japan index rising 1.78% heading into the close of tradeing.
In Europe, the Stoxx 600 closed 0.32% higher while Britain's FTSE 100 was marked 0.48% lower by the end of the trading day in London.
