Oct 20 – Wall Street indexes kicked off the week on a solid ground, powered by gains in mega-cap stocks, while investors braced for a wave of corporate earnings and a crucial inflation report that could steer the market’s next move.
Markets shook off last week’s turbulence, sparked by renewed concerns over systemic credit stress in the banking sector, as investors piled into tech heavyweights in a classic “buy the dip” move.
Apple (AAPL.O), opens new tab shares rose 4.3% to a record high, while Meta (META.O), opens new tab and Netflix (NFLX.O), opens new tab gained more than 2% each. Alphabet (GOOGL.O), opens new tab added more than 1%.
The CBOE Volatility Index (.VIX), opens new tab, Wall Street’s fear gauge, slipped to its lowest in over a week, signaling a return of investor confidence.
“AI is the story and investors are excited about the tremendous productivity gains that will come from AI. You have massive spending that will be further validated by many of the ‘magnificent seven’,” said Eric Schiffer, CEO private equity firm, Patriarch Organization.
Investor attention this week will also be on earnings from Wall Street heavyweights, including Tesla (TSLA.O), opens new tab, Ford (F.N), opens new tab, GM (GM.N), opens new tab and Netflix (NFLX.O), opens new tab, as they are expected to offer a fresh stress test for equities trading near lofty valuations.
Some U.S. regional bank results, too, will be monitored for a pulse-check on the sector’s health.
S&P 500 companies are expected to post a 9.3% year-on-year jump in third-quarter profit, according to LSEG IBES data.
At 11:18 a.m., the Dow Jones Industrial Average (.DJI), opens new tab rose 369.91 points, or 0.80%, to 46,560.52. The S&P 500 (.SPX), opens new tab gained 66.01 points, or 0.99%, to 6,730.02, while the Nasdaq Composite (.IXIC), opens new tab advanced 310.03 points, or 1.37%, to 22,990.00.
The Philadelphia Semiconductor Index (.SOX), opens new tab hit an all-time high, and was last up 2.2%.
Micron (MU.O), opens new tab shares rose 3.6% and hit a record high after Barclays raised its price target on the stock. ON Semiconductor (ON.O), opens new tab and KLA (KLAC.O), opens new tab added 5.6% and 4.8%, respectively.
S&P Energy index (.SPNY), opens new tab gained 0.3%, while industrials (.SPLRCI), opens new tab added almost 1%.
On the trade front, U.S. President Donald Trump suggested easing tariffs on China if Beijing resumes key agricultural purchases such as soybeans. He, however, blamed the latest breakdown in talks on China’s tightening control over rare earth exports.
DELAYED CPI
A U.S. government shutdown, which began on October 1, has halted key economic data releases, leaving investors without crucial indicators. That places Friday’s consumer price report, a pivotal inflation gauge, firmly in the spotlight ahead of the Federal Reserve’s policy meeting on October 28-29.
While September’s core inflation is expected to hold steady at 3.1%, markets widely expect a quarter-point rate cut this month, with another reduction likely in December.
Among other stocks, Applovin (APP.O), opens new tab dropped 3.8% after Fuzzy Panda disclosed a short position in the company.
Boeing (BA.N), opens new tab gained about 1% after the planemaker won approval from the U.S. Federal Aviation Administration to raise 737 MAX production to 42 planes per month.
WeightWatchers (WW.O), opens new tab climbed 9.4% after the company partnered with Amazon for weight-loss drug delivery.
Advancing issues outnumbered decliners by a 4.14-to-1 ratio on the NYSE and by a 3.17-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and four new lows, while the Nasdaq Composite recorded 60 new highs and 47 new lows.