Stocks rallied on Monday as investors anticipated a busy week with midterm congressional elections and key inflation data in the coming days, dismissing Apple’s supply warning.
The Dow Jones Industrial Average rose 423.78 points, or 1.31%, to 32,827.00. The S&P 500 gained 0.96% to 3,806.80. The Nasdaq Composite rose 0.85% to 10,564.52, after trading between gains and losses earlier in the session. All three major averages posted a second positive day in a row.
Apple shares gained about 0.4%, despite falling more than 1% earlier in the session, after the tech company said iPhone production has been temporarily reduced due to of the Covid-19 restrictions in China. Palantir shares, meanwhile, fell nearly 11.5% after the company posted disappointing quarterly results. Carvana fell 15.6%.
Facebook parent Meta gained 6.5% after a Wall Street Journal report said the company could begin layoffs as early as Wednesday.
Key elections and economic reports ahead
Tuesday’s midterm elections will determine which party controls Congress and affect the direction of future spending. Democrats currently control the House and have a majority in the Senate.
Investors could embrace a potential deadlock coming out of the midterm elections, as a Democratic president, with a Republican or divided Congress, has historically meant above-average gains, RBC’s Lori Calvasina said in a Monday note .
“The market is hoping that some kind of Republican sweep of Congress will lead to some kind of stalemate in Washington, which they see as good, or at least no new spending, which would be good for rates and Treasury supply.” , Brad said. Conger, deputy CIO of Hirtle Callaghan & Co.
On the economic front, investors expect Thursday’s consumer price index report to provide further insight into how far the Federal Reserve needs to go to reduce inflation. A hot report could signal to investors that a turnaround from a prolonged period of higher interest rates may not be imminent.
“[In] In order for equity and bond markets to match the performance of inflation after the peak shown in the table, inflation must continue to fall, and at a faster rate than we have seen so far. Until the Fed signals that the ‘pivot’ is near, things could remain challenging,” Baird’s Ross Mayfield wrote in a recent note.
Elsewhere, several companies are expected to report on Monday, including Activision Blizzard, Lyft and Take-Two Interactive. Corporate earnings season is winding down with most S&P 500 companies reporting results.
Read today’s market coverage in Spanish here.