This is a pivotal week for the stock market, and investors will need to keep their wits about them as risks and triggers grow rapidly.
Big tech profits are likely to dominate the discussion, but Friday’s October jobs report could have a big impact on whether last week’s tensions persist.
The Middle East conflict remains a concern for the market, but it appears to have been shelved for the time being. Oil prices fell nearly 4% early Monday after oil facilities were saved in Israel’s attack on Iran over the weekend.
In premarket trading Monday, S&P 500 futures rose 0.6%, Dow Jones Industrial Average futures rose 0.5% and Nasdaq 100 futures rose 0.8%.
The tech-heavy Nasdaq Composite Index hit a new intraday high on Friday, and Monday’s early moves suggest momentum may continue. This optimism comes on the heels of a week of huge profits for tech companies. Five companies from the so-called Magnificent Seven, Alphabet, Amazon, Apple, Metaplatform, and Microsoft, are scheduled to report their financial results.
Big Tech earnings are always a big market event, and this quarter is no different as uncertainty creeps into the market and valuations remain elevated. More than 150 companies are expected to report in the coming days in the biggest week of the third-quarter earnings season.
But outside of technology, the picture is less rosy. The Dow and S&P 500’s six-week winning streak came to an abrupt halt last week as bond yields rose.
Many more potential pitfalls await this week and next, especially on Election Day. Before that, Friday’s October jobs report could take attention away from Big Tech’s earnings and put the spotlight back on the Federal Reserve.
A strong jobs report could reduce the rate of interest rate cuts in coming months, potentially putting further brakes on stock prices.
“There’s going to be a lot that will test the nerves of the market,” Deutsche Bank strategist Peter Sidorov said on Monday, describing last week’s actions as “a bit of a scare.”
