All three major indexes rose on Monday as traders tried to add to sharp gains seen last week and weighed recent moves in rates.
The Dow Jones Industrial Average traded 483 points higher, or 1.6%. The S&P 500 rose 1.5%, while the Nasdaq added 1%.
Investors will be watching the earnings of tech companies like Apple, Alphabet, Amazon and Microsoft this week. Wall Street will also watch for inflation data, with October manufacturing and services purchasing managers’ indexes due on Monday.
“It’s all about earnings, and in our view, earnings are coming in, frankly, at or below expectations,” said Terry Sandven, chief equity strategist at US Bank’s wealth management division. Inflation data and interest rates both set the tone, but investors are now holding on to earnings in the peak reporting season. “To a large extent, as the next couple of weeks go, so will the broader market.”
The 10-year Treasury yield was higher on Monday, Recovering from previous slump. It last traded up 1 basis point at 4.225%. The 2-year yield is close to 4.494%.
The moves come after another volatile week for stocks as the third-quarter earnings season heats up. The major averages had their biggest weekly gains since June, with the Dow advancing 4.9%. The S&P 500 and Nasdaq rose 4.7% and 5.2%, respectively.
Part of those gains came on Friday, when the Dow rallied more than 700 points, while the S&P 500 and Nasdaq each rose 2.3%. Investors are looking at corporate earnings and the Wall Street Journal reports that some Fed officials are worried about interest rate hikes.
“What’s unique about this week is, of course, we’re starting higher,” said Kelsey Mowry, president of Motley Fool Asset Management. “I think that strong jobs data gave the Fed the ammunition they needed to keep raising rates, but Friday’s news really shook the market in a positive way.”
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