US Markets End Neutral as Earnings Season and Fed Rate Uncertainty Weigh on Investors

Major U.S. equity indexes closed largely unchanged on the final trading day of a week marked by earnings announcements and uncertainty about the Federal Reserve’s rate outlook.

CNBC Daily Open: Nasdaq hits all-time high even amid poor earnings growth https://t.co/p5rsiS3WzN

— CNBC (@CNBC) October 28, 2024

The S&P 500 ended the day near its opening level, despite briefly gaining close to 1% during the session.

The banking sector saw significant losses, with New York Community Bancorp falling 8.3% due to a weaker forecast, Goldman Sachs Group Inc. slipping 2.3%, and JPMorgan Chase & Co. down 1.2%.

Of the S&P 500 companies, only 183 finished higher. The gains were led by the “Magnificent 7” stocks. Apple rose 0.36%, Microsoft and Nvidia each gained 0.81%, Amazon climbed 0.78%, Meta Platforms added 0.96%, Alphabet increased 1.5%, and Tesla surged 3.34%.

Tesla kicked off the “Magnificent 7” earnings season with a strong quarterly report that boosted its stock.

Q3 2024 Shareholder Update → https://t.co/sXBSeLibSL

— Highlights

– Produced our 7 millionth vehicle at Fremont factory!

– Preparations for new vehicles remain underway (including more affordable models), which we'll begin launching in the first half of 2025

– Record gross… pic.twitter.com/is1UhqdH7r

— Tesla (@Tesla) October 23, 2024

Shares of Mohawk Industries (MHK) dropped 13.7%, marking the S&P 500’s largest loss, following disappointing Q3 results.

HCA Healthcare (HCA) also declined 8.8% after its Q3 revenue and earnings per share missed estimates.

U.S. Markets Balance Earnings Season and Fed Rate Speculation

With the busiest week of the Q3 earnings season ahead, Wall Street is preparing for key announcements from five of the “Magnificent 7” stocks, including Alphabet, Microsoft, Meta Platforms, Amazon, and Apple.

Additionally, traders are monitoring the upcoming U.S. presidential election on November 5, as well as economic indicators like next week’s jobs report, for insight into the Federal Reserve’s rate plans.

It’s another big week of earnings. 5 of the Mag 7 names lead the way in Microsoft, Amazon, Apple, Alphabet and Meta. pic.twitter.com/jshFgXHk8g

— Eric Soda (@EricSoda) October 27, 2024

In other markets, oil futures fell over 4% on Monday as Iranian sources reported limited damage from recent Israeli airstrikes on military installations. Citi reduced its three-month Brent oil forecast by $4, expecting prices to hit $70 per barrel.

Mixed Market Performance: Nasdaq Reaches Record High, Dow Declines

Last week concluded with a mixed market performance. On Friday, the Nasdaq Composite reached a record high of 18,518.61, gaining 0.56%, while the Dow Jones Industrial Average declined 259.96 points, or 0.61%, to close at 42,114.40.

Nasdaq 100 futures rose 0.73% after the close. In pre-market trading this morning, Nasdaq 100 futures are down 0.73%, trading at $74.69.

Conclusion

In summary, markets remain cautious amid earnings reports, upcoming economic data, and Fed rate uncertainty. Tech gains provide some support, but volatility in oil prices and mixed earnings keep risk appetite restrained.

Investors await clearer signals from corporate results and economic indicators to gauge the market’s next direction.