Stocks fell on Monday, Dow on track for best month since 1976

Stocks face 'major regime change', says Morgan Stanley's Andrew Slimon

Stocks fell on Monday as the last trading day of October began, but the major indexes were on track to end their two-month losing streak.

The S&P 500 was last down 0.8%, while the Nasdaq Composite lost 1.1%. The Dow Jones Industrial Average fell 160 points, or about 0.4%.

The market recovered sharply in October. The Dow led the gains, last up 14.1% for the month. The 30-stock index is on track for its best month since 1976 as investors bet more traditional companies such as banks will lead the next bull market. The S&P 500 and Nasdaq Composite also rose more than 8% and 4%, respectively, in October.

“After last week’s big gains, stocks are taking a breather,” said Ryan Detrick, chief market strategist at Carson Group. “Then, given Wednesday’s always-important Fed meeting and rate decision, a pause makes more sense.”

Despite a mixed third-quarter earnings season, earnings for October have arrived, pointing to slower growth and some major disappointments from big tech companies like Meta Platforms and Amazon. Those names contributed to Monday’s drop in tech stocks as investors fled the growth sector.

Traders are preparing this week for the latest Federal Reserve meeting, which begins on Tuesday. The central bank is widely expected to raise interest rates by 75 basis points on Wednesday. Many on Wall Street are looking for a signal from the FOMC statement or Chairman Jerome Powell’s news conference that the Fed may pause or taper in the near future.

“Wednesday’s information is critical for future market expectations,” said Quincy Krosby of LPL Financial. “For the question-and-answer session with reporters, Chairman Powell will have to answer his questions subtly as if he were walking a tightrope.”

Earnings season continues this week with reports from Uber, Pfizer and Advanced Micro Devices. Investors are also looking ahead to Friday’s October jobs report.

Source link