US Stock Market Overview – Stocks Rally Ahead of Earnings Led by Financials

U.S. stocks rallied on Monday driven by a surge in technology stocks that put major indexes on track for their highest close in nearly six weeks. Most sectors in the S&P 500 index were higher on Monday, led by gains in the financial and communications sectors. Materials bucked the trend. Markets were also focusing on additional stimulus which is unlikely to be brought to the President’s desk until after the election. The markets seem to believe that a Biden victory with a senate sweep will provide a larger stimulus that with the current administration.

Apple shares rose move than 6% on Monday ahead of their October event where their new phones will be announced. Apple shares are now trading at 30-times earnings which is not cheap but less than many of its competitors. The VIX volatility index moved sideways but did not decline despite the rally in the large-cap index. The US dollar continued to move lower helping to buoy large-technology shares. The US bond market was closed for the day in observance of the Columbus Day Holiday.

Earnings season kicks off this week with the large banks. There is also a plethora of economic data including September CPI, PPI, industrial production, and retail sales along with the October Empire and Philadelphia Fed surveys.  The Senate began its confirmation process for President Trump Supreme Court Nominee Amy Coney Barrett. The Republican lead senate is desperate to get the confirmation concluded before the election. Barret is a conservative and if the Senate flips the new president will replace Ruth Bader Ginsburg’s seat with a liberal justice. Ahead of earnings technology shares were some of the best performers, helping to lift the Nasdaq 100 by nearly 3%.