U.S. stocks could get off to a positive start on Monday after the averages registered a mixed week. While the S&P 500 and Dow Jones snapped their six-week winning streak, the Nasdaq Composite chalked its seventh straight week of gains.
Earning news flow will continue to pick up momentum in the coming days, potentially cushioning any downside, with five of the “Magnificent 7” companies all set to post their earnings this week. This includes Apple Inc. AAPL, Microsoft Corp. MSFT, Alphabet Inc. GOOG GOOGL, Meta Platforms Inc. META, and Amazon.com Inc. AMZN.
| Futures | Performance (+/-) |
| Nasdaq 100 | 0.78% |
| S&P 500 | 0.62% |
| Dow Jones | 0.52% |
| R2K | 0.68% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY gained 0.64% to $582.72 and the Invesco QQQ ETF QQQ rose 0.77% to $499.11, according to Benzinga Pro data.
Cues From Last Week: Amid simmering tensions in the Middle East and Israel's missile strikes in Iran, oil prices tumbled over the weekend.
Treasury yields rose during the week, signaling concerns that regardless of who wins the elections, the next administration might struggle with fiscal discipline. This sentiment was further exacerbated by the International Monetary Fund's warnings on the long-term trajectory of the U.S. national debt.
On the economic data front, the University of Michigan consumer sentiment for the U.S. rose to 70.5 in October compared to a preliminary reading of 68.9.
Both the Dow Jones and S&P 500 ended a six-week winning streak, falling around 1% and 2.7%, respectively. The Nasdaq recorded gains for the seventh straight week, gaining nearly 0.2% last week.
| Index | Week’s Performance (+/-) | Value |
| Nasdaq Composite | 0.2% | 18,518.61 |
| S&P 500 | -1% | 5,808.12 |
| Dow Jones | -2.7% | 42,114.40 |
| Russell 2000 | 1.87% | 2,207.99 |
Insights From Analysts: Ryan Detrick, Chief Market Strategist at Carson Group, highlighted that this was the best "Sell in May" period since 2009.
"This is the best ‘sell in May’ period since 2009. Remember when they told us to sell because of valuations, yield curves, wars, inflation, Fed, elections, quad poor, GDI, LEIs, weak breadth, recessions, etc? I do,” he wrote.
"What happens next? Strength in these usually weak months is a clue the bull is alive and well."
He added that the best six months of the year for equity markets are "right around the corner."
However, despite mega-cap earnings scheduled for this week, rising treasury yields could potentially play spoilsport, according to Nathan Peterson, Director of Derivatives Analysis at the Schwab Center for Financial Research.
"If yields continue to move higher next week this could generate selling pressure, regardless of mega-cap tech earnings," Peterson said.
He underscored that pre-election selling next week is a "possibility" and that there could be higher volatility in the markets.
See Also: How To Trade Futures
Upcoming Economic Data: Monday's economic calendar is light, with only the Dallas Fed's Manufacturing Business Index for October set to be released.
- On Monday, the Dallas Fed Manufacturing Business Index will be released at 10:30 a.m. ET.
- On Tuesday, retail (ex-auto) and wholesale inventory data will be released at 8:30 a.m. ET.
- House Price Index will be released at 9 a.m. ET.
- On Wednesday, Mortgage Market and Refinance indices will be released at 7 a.m. ET.
- The Bureau of Economic Analysis will release Q3 GDP numbers at 8:30 a.m. ET.
- The U.S. Department of Commerce will release the Q3 Real Consumer Spending data at 8:30 a.m. ET.
- Pending home sales data will be released at 10 a.m. ET.
- Crude oil inventories data will be released at 10:30 a.m. ET.
- On Thursday, pending jobless claims and the Core PCE price index will be announced at 8:30 a.m. ET.
- On Friday, payroll data will be released at 8:30 a.m. ET.
Stocks In Focus:
- Exxon Mobil Corp. XOM, and Occidental Petroleum Corp. OXY fell by over 2% in premarket trading due to falling crude oil prices.
- Delta Air Lines Inc. DAL rose over 2% after the company sued CrowdStrike Holdings Inc. CRWD for the July IT outage, saying it cost the company over $500 million.
- Taiwan Semiconductor Manufacturing Co. Ltd. TSM shares fell 1.7% after cofounder Morris Chang warned that the company faces challenges due to a growing threat to the free trade of chips amid geopolitical tensions.
- Investors are awaiting earnings results from ON Semiconductor Corporation ON, Waste Management, Inc. WM, and Ford Motor Company F today.
Commodities, Bonds And Global Equity Markets: Crude oil futures tumbled in the early New York session, falling by over nearly 6% due to Israel's strikes on Iran.
The 10-year Treasury note yield surged to 4.254%.
Major Asian markets ended mixed on Monday, while European stocks showed tentativeness and were mostly lower in early trading.
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