Wall Street Surges As Traders Await End Of Fed Tightening, Crucial Earnings Reports: What's Driving Markets Monday?

U.S. stocks opened the week on a positive note, with investor sentiment improving ahead of the expected announcement from the Fed to maintain unchanged interest rates on Wednesday.

Traders will closely monitor earnings reports from Apple, Inc. AAPL and chipmakers Qualcomm, Inc. QCOM and Advanced Micro Devices, Inc. AMD.

However, Treasury yields continue to rise, with the 10-year yield reaching 4.90%, reflecting persistent nervousness in the bond market

Cues From Monday’s Trading

The S&P 500 and Nasdaq 100 both gained 0.7%, while blue-chip Dow Jones Industrial Average stocks rallied 1.1%. Small-cap stocks posted a more modest 0.2% increase.

US Index Performance on Monday

Analyst Color

An analyst suggested that there could be light at the end of the tunnel for the market. “Given how bearish the financial markets have become, and how nearly all the metrics associated with oversold conditions are pointing to an impending ‘relief’ or ‘oversold’ rally, markets appear poised for a bounce,” said Quincy Krosby, chief global strategist at LPL Financial.

However, many investors and traders have lost hope in the market rebounding and ending the year on a strong note, according to the analyst. “Markets have a way of dismissing consensus estimates when you least expect it,” he said, implying that stocks could push higher.

Monday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 0.8% higher to $413.92
• The SPDR Dow Jones Industrial Average ETF DIA was 1.2% higher to $327.90 
• The Invesco QQQ Trust QQQ rose 0.7% to $347, according to Benzinga Pro data.

Looking at S&P 500’s sector ETFs:

• The Communication Services Select Sector SPDR Fund XLC rose 1.7%, outperforming all other S&P 500 sectors.
• The Real Estate Select Sector SPDR Fund XLRE was the laggard, down 0.7%.

Stocks In Focus

• U.S. automakers Stellantis N.V. STLA and General Motors Company GM were down slightly after reaching tentative deals with the United Auto Workers union.
• SoFi Technologies, Inc. SOFI remained relatively unchanged in an extremely volatile session, erasing its early gains of 16% following the release of the company’s mixed earnings report.
• McDonald’s Corporation MCD rose 1.5% on stronger-than-expected earnings and revenue last quarter.
• Enphase Energy, Inc. ENPH fell 6.8% as Deutsche Bank cut the company’s target price from $125 to $80.
• Companies reporting after the market close include Vornado Realty Trust VNO, Rambus Inc. RMBS, Wolfspeed, Inc. WOLF, Tenet Healthcare Corporation THC, Transocean Ltd. RIG, Pinterest, Inc. PINS and Lattice Semiconductor Corporation LSCC

Commodities, Bonds, Other Global Equity Markets

Crude oil fell 3%, with a barrel of WTI-grade crude trading at $82. The United States Oil Fund ETF USO was 3% lower to $76.  

Treasury yields were higher, with the 10-year yield up by 6 basis points to 4.90% and the two-year yield up by 4 basis points to 5.04%. The iShares 20+ Year Treasury Bond ETF TLT was 0.9% lower for the day. 

The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP up 0.3%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.4% higher to 1.0605.

European equity indices had a positive session. The SPDR DJ Euro STOXX 50 ETF  FEZ rose 1.1%. 

Gold edged 0.3% down to $1,999/oz, while silver rose 1.1% to $23.34. Bitcoin BTC/USD fell 0.2% to $34,465.

Staff writer Piero Cingari updated this report midday Monday. 

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