Live Stock Market News Updates: Stocks Fall to Start a Busy Week, But End October with a Gain

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US stocks trailed Monday in a bearish last trading day of October, but still closed the month firmly higher as they began a busy week marked by Fed policy, earnings and data. of employment.

The S&P 500 (^GSPC) declined 0.7%, while the Dow Jones Industrial Average (^DJI) shed roughly 130 points, or 0.4%. The high-tech Nasdaq Composite (^IXIC) was down 1%.

Equity markets still rounded the month higher after a brutal fall in September. The Dow closed October with a gain of 13.96%, its best monthly advance since January 1976 and its 10th best month in the last century, according to Bespoke Investment Group data.

The Fed’s next policy announcement on Wednesday and October’s monthly employment report to be released on Friday will determine whether the tailwind will continue to drive stocks through the rest of 2022.

US central bank officials are poised to raise the Fed’s benchmark benchmark rate by another 0.75%, but some strategists believe it could be the last lofty hike before officials scale back plans. adjustment.

Pantheon Economics Chief Economist Ian Shepherdson said that with core CPI still high and payroll gains averaging 372,000 during the third quarter, investor expectations that policymakers will keep raising rates over the next year are justified.

“But now we see enough straws in the wind to think that the economy is at a real turning point, while investors are putting too much emphasis on the data, which at the moment seems to suggest that growth is holding up well,” he said. .

WASHINGTON, DC – OCTOBER 14: US Federal Reserve Chairman Jerome Powell attends an IMFC (International Monetary and Financial Committee) meeting at the IMF and World Bank Annual Meetings at the headquarters of the IMF, on October 14, 2022 in Washington, DC. (Photo by Drew Angerer/Getty Images)

“We doubt Chairman Powell’s tone will change significantly this week, but he won’t be able to stem the tide if the numbers turn,” Shepherdson added.

Elsewhere on Monday, President Joe Biden is scheduled to deliver a speech at 4:30 p.m. “, the White House said in a statement.

The Labor Department’s jobs report is expected to show monthly payrolls fell below 200,000, a big drop from an average of 400,000 during much of the pandemic recovery, but still close to the pre-pandemic monthly average. . Economists expect 190,000 jobs were added or created last month, according to consensus estimates from Bloomberg.

And on the earnings front, companies are still releasing third-quarter results. Of the S&P 500 companies that have reported so far, the net profit margin for the index is 12%, which is down from the previous quarter’s net profit margin and down from the net profit margin from a year ago. , but higher than the five-year net profit margin. average net profit margin of 11.3%.

Bank of America analysts said in a note that overall earnings have so far continued to “defy recession calls,” with many corporate metrics still above expectations.

However, mega caps have been an exception to that sentiment this quarter. The data shows that third-quarter results marked the worst earnings season on record for the mega-cap giants after one of their best seasons last quarter. Shares of Facebook parent company Meta (META) fell to the lowest close since 2015, dragged down by a post-earnings sell-off.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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