After a challenging week marked by inconsistent earnings from large tech firms and market corrections, US stocks showed signs of recovery on Monday. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all bounced back, each rising by about 0.7% to 0.8%. This rebound was influenced by investors' anticipation of the Federal Reserve's policy decision, potential impacts on Apple (NASDAQ:AAPL)'s earnings due to China's iPhone restrictions, and the October US jobs report.
Under its "higher for longer" policy, the Federal Reserve is expected to maintain interest rates steady on Wednesday. This expectation comes as the Personal Consumption Expenditures (PCE) Index, the Federal Reserve's primary inflation indicator, exhibited a continued cooling of prices in September. The PCE Index is a critical factor that will significantly influence the interest rate decision on Nov. 1.
In Friday's midday trading, despite early gains being reversed, the S&P 500 held steady while the Nasdaq Composite managed to rebound by approximately 0.9%. This resilience was attributed to positive earnings reports from Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC), and was exhibited despite the market's movement towards correction territory. However, the Dow Jones Industrial Average dropped around 0.6%.
The resilience of US consumers was indicated by McDonald's (NYSE:MCD) outperforming Q3 earnings estimates despite high borrowing costs. Additionally, the de-escalating Israel-Gaza conflict led to a dip in oil prices, encouraging investors to re-enter markets.
After a tough period characterized by mixed Big Tech results and market corrections, the stock market now looks to the Federal Reserve and Apple for a potential positive turnaround.
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