Wall Street set to set new records after October rally

U.S. equity futures rose on Monday, setting the stage for new records ahead of a crucial Federal Reserve move later in the week.

What is happening
  • Futures contracts on the Dow Jones Industrial Average YM00,
    + 0.46%
    increased 163 points, or 0.5%, to 35,867

  • Futures on the S&P 500 ES00,
    + 0.43%
    gained 0.4%, or 19 points, to 4,616

  • Futures on the Nasdaq 100 NQ00,
    + 0.40%
    added 0.4%, or 55 points, to 15,893

Friday, the Dow Jones Industrial Average DJIA,
+ 0.25%
rose 89 points, or 0.25%, to 35,820, the S&P 500 SPX,
+ 0.19%
rose 9 points, or 0.19%, to 4,605, and the Nasdaq Composite COMP,
+ 0.33%
gained 50 points, or 0.33%, to 15,498, with each major index setting a record. Last month’s 7% rise for the S&P 500 was the best since November 2020, after the U.S. election and Pfizer first announced the results of a study on its COVID-19 vaccine.

What drives the markets

The backdrop to the stock market’s gains has been impressive earnings. According to Credit Suisse, profits of S&P 500 companies exceeded estimates by 10% in the third quarter.

The Fed will announce its latest monetary policy decision on Wednesday, with expectations that it will finally announce the reduction in asset purchases. Traders will be closely scrutinizing comments on its latest actions.

“We are waiting [Fed Chair Jerome] Powell will not actively push market prices off rate hikes given the high uncertainty about the outlook, especially with regards to the risks of upside inflation, ”said Deutsche Bank economists led by Matthew Luzzetti.

A weekend deal on US and EU steel and aluminum tariffs also contributed to an optimistic tone, as well as a convincing victory for the ruling LDP party in Japan which sent the Nikkei 225 NIK,
+ 2.61%

About Meredith Campagna

Check Also

Can the Fed rein in inflation without further crushing the stock market? What investors need to know.

By Isabelle Wang Investors should brace for more volatility as policymakers set for another giant …