Earnings season kicks into high gear this week, with Wall Street heavyweights including Tesla, Ford, GM, Netflix, Procter & Gamble, Coca-Cola, IBM and Intel set to report. Their results will provide a new stress test for stocks trading at high valuations.
Upcoming results from US regional banks will also be watched to understand the health of the sector, after renewed fears of systemic credit stress triggered a flight to safety last week.
According to data from LSEG IBES, S&P 500 companies are expected to post 9.3% year-over-year earnings growth in the third quarter. But with expectations running high, investors will be looking for strong developments to justify the market’s recent rally.
“Renewed credit and trade policy concerns are indicative of how fragile market conditions are,” said Jordan Rizzuto, chief investment officer at GammaRoad Capital Partners.
US President Donald Trump proposed cutting tariffs on China if Beijing resumes key agricultural purchases such as soybeans. However, he blamed the latest breakdown in talks on China’s tightening controls on rare earth exports. Meanwhile, Trump vowed to maintain “massive” tariffs on India unless it halts Russian oil imports, and considered raising duties on Colombia amid a feud over its role in the illegal drug trade. At 9:51 a.m., the Dow Jones Industrial Average rose 254.07 points, or 0.55%, to 46,452.52. The S&P 500 gained 50.26 points, or 0.75%, to 6,713.77, while the Nasdaq Composite rose 234.19 points, or 1.03%, to 22,914.16.
The AI-driven optimism continued to drive markets, with the Philadelphia Semiconductor Index hitting an all-time high. The last increase was 1.8%.
Shares of Micron rose 3.2% to hit a record high after Barclays raised its price target for the stock. ON Semiconductor and KLA added 4.4% and 3.7% respectively.
The S&P Energy index gained 0.7%, while the industrial sector rose almost 1%.
DELAYED CPI
A US government shutdown that began on October 1 has halted the release of key economic data, leaving investors without crucial indicators. That puts Friday’s consumer price report, a crucial inflation gauge, firmly in the spotlight ahead of the Federal Reserve’s Oct. 28-29 policy meeting.
While core inflation is expected to remain stable at 3.1% in September, markets are broadly expecting a quarter-point rate cut this month, with another cut likely in December.
“The reports that come out, not just this one but in the coming months, still won’t answer the question of how trade policy will impact inflationary pressures over the longer term,” Rizzuto said.
Among other stocks, Applovin fell 5.1% after Fuzzy Panda disclosed a short position in the company.
Boeing rose 1.3% after the aircraft manufacturer received approval from the US Federal Aviation Administration to increase production of 737 MAX to 42 aircraft per month.
WeightWatchers rose 11.2% after the company partnered with Amazon to supply weight-loss drugs.
Advancing issues outpaced declining issues by a 6.13-to-1 ratio on the NYSE and by a 4.24-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and three new lows, while the Nasdaq Composite posted 43 new highs and 33 new lows.
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