Stock Market Continues Bearish Week

On Monday evening, the stock markets closed lower than Friday’s closing numbers, thanks in part to continuing Middle East fighting and the heavy hurricane season.

Before trading opens today, the Nasdaq Composite will start off 1.18% down from the previous day’s trading. The Dow Jones has lost 398 points, falling by 0.94%, and the S&P 500 dropped 0.95%.

The declining stock market can be mostly blamed on elevated action between Israel and Iran, with Lebanon taking a lot of the missile volleys. The assassination of Hezbollah leadership recently has prompted increased attacks in retaliation. Crude oil prices climbed 3% on Monday, partly due to the fighting there.

The stock market was doing very well after the most recent interest rate cut issued by the Federal Reserve. Another cut could be coming in November and then further cuts in 2025. Those cuts could help to get the stock market back on track.

Investors should also take into consideration the upcoming economic reports scheduled for later today. The Trade Balance report is expected to show a significant decrease from the previous report. Today’s NFIB Small Business Index should show an increase, though.

Stock Market Outlook

As hurricane season continues, expect insurance companies to take further hits. Many of them have already seen serious stock decreases over the last few weeks. Travel related stocks will likely be down as well, including hotels, ground transportation, and airlines.

Today marks the release of the quarterly report for PepsiCo (PEP), with Domino’s Pizza (DPZ) following on Thursday. Several major banking stocks will release their earnings reports on Friday, and these will be some of the most significant for the week as far as impact on the stock market is concerned. As the banks go, so go the economy and the stock market, so investors should pay special attention to earnings reports from JP Morgan (JPM) and Wells Fargo & Co (WFC).