The stock market rallied on Monday as investors looked ahead to a busy week of earnings reports from major technology companies. The Dow Jones Industrial Average gained 273.17 points, or 0.65%, to close at 42,387.57. The S&P 500 rose 0.27% to end at 5,823.52, while the Nasdaq Composite climbed 0.26% to finish at 18,567.19.
Softening oil prices helped lift stocks, with U.S. crude futures dropping 6% and international benchmark Brent falling sharply after weekend airstrikes by Israel against Iran spared key Iranian crude facilities. The geopolitical situation had been a concern for investors, but the lack of impact on oil supplies eased those worries. This week marks the peak of the third-quarter earnings season, with five of the “Magnificent Seven” companies scheduled to report their latest financial results.
Shares of Apple and Alphabet each rose about 0.9% ahead of their earnings announcements. Mike Dickson, head of research and quantitative strategies at Horizon Investments, noted, “Given high valuations overall, there’s going to be a laser focus on if they’re able to continue to hit those growth numbers.”
In addition to corporate earnings, traders are watching for key economic data this week, including a preliminary reading on third-quarter gross domestic product, the September personal consumption expenditures (PCE) price index, and the October jobs report.
Stocks rise on anticipation of earnings
Small cap stocks outperformed the broader market on Monday, with the Russell 2000 climbing more than 1.6% compared to the S&P 500’s 0.5% gain. However, the Russell 2000 has underperformed year-to-date, gaining less than 11% in 2024 while the S&P 500 has jumped more than 22%. Financials and utilities were the top-performing sectors, each rising 1% on the day.
Raymond James and Goldman Sachs led the financials sector with 2% gains, while Vistra jumped 3% to lead the utilities sector. Energy was the only sector in negative territory, falling 0.6% as oil prices recorded their worst day in two years. Clean energy stocks face uncertainty as the U.S. presidential election approaches, with recent polling showing a dead heat between former President Donald Trump and Vice President Kamala Harris.
A Republican sweep could jeopardize the Inflation Reduction Act and lead to a selloff in clean energy stocks, while a Democratic win could spur a relief rally. Despite the uncertainties, historical data bodes well for November, which has been the best trading month of the year for the S&P 500 over the last decade and has been higher in 11 of the past 12 years. The S&P 500 is currently on track to finish October with a gain of more than 1%.
