Stock Market Today: S&P 500 Rebounds Amid Strong Earnings and Economic Data
The stock market showed signs of recovery on Friday, October 25, 2024, as investors digested a flurry of corporate earnings reports and encouraging economic data. The S&P 500 index broke its three-day losing streak, buoyed by strong performances from tech giants and positive economic indicators.
Market Performance: Major Indexes on the Rise
As of midday trading:
– The S&P 500 ($SPX) (SPY) climbed 0.20%
– The Nasdaq 100 ($IUXX) (QQQ) gained 0.63%
– The Dow Jones Industrial Average ($DOWI) (DIA) slipped 0.31%
The slight dip in the Dow was primarily due to disappointing results from some of its components, including International Business Machines (IBM) and Honeywell International (HON).
Why is the Market Up Today?
Several factors contributed to today’s market optimism:
1. Strong Corporate Earnings: Over 27% of S&P 500 companies have reported third-quarter results, with 76% surpassing analyst expectations . This earnings season has demonstrated the resilience of corporate America in the face of economic challenges.
2. Tesla’s Stellar Performance: Tesla (TSLA) shares surged more than 16% after reporting its biggest quarterly profit in a year, providing a significant boost to the S&P 500 and Nasdaq .
3. Positive Economic Data: The latest economic indicators paint a picture of a robust economy:
– Weekly jobless claims unexpectedly fell to 227,000, signaling a strong labor market .
– The October S&P manufacturing PMI rose to 47.8, exceeding expectations .
– September new home sales reached a 16-month high of 738,000 .
4. Declining Treasury Yields: The 10-year Treasury yield dropped 2.6 basis points to 4.220%, easing some pressure on equities .
Notable Stock Movements
– Tesla (TSLA): Up 16% on strong Q3 results
– United Parcel Service (UPS): Gained over 5% after beating Q3 EPS estimates
– International Business Machines (IBM): Down 6% on lower-than-expected Q3 revenue
– Honeywell International (HON): Fell more than 4% after cutting its full-year sales forecast
– Newmont (NEM): Dropped over 8% on weak Q3 sales
Economic Outlook and Market Sentiment
The recent market performance and economic data have bolstered optimism for a “soft landing” scenario, where inflation is brought under control without triggering a recession. Paul Hickey, co-founder of Bespoke Investment Group, commented on the recent market volatility, stating, “It’s a rough day, but these days happen” .
Investors are closely monitoring the Federal Reserve’s next moves. Currently, the market is pricing in a 95% chance of a 25 basis point rate cut at the November 6-7 FOMC meeting .
Global Market Context
European markets showed resilience, with the pan-European Stoxx 600 up 0.25% in early trading . Asian markets were mixed, with South Korea narrowly avoiding a technical recession as its Q3 GDP grew 0.1% quarter-on-quarter .
Looking Ahead: Market News Today
As we move into the final quarter of 2024, investors will be keeping a close eye on:
1. Ongoing earnings reports, with about 20% of S&P 500 companies set to report this week .
2. The Federal Reserve’s upcoming policy decision and its impact on interest rates.
3. Geopolitical tensions, particularly in the Middle East, which continue to influence market sentiment.
In conclusion, today’s market performance reflects a delicate balance between strong corporate earnings, positive economic indicators, and ongoing global uncertainties. As always, investors are advised to stay informed and maintain a diversified portfolio in these dynamic market conditions.
