Monday’s Stock Market Decline Coincides With the Culmination of October’s Remarkable Rally

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Last Updated on November 1, 2022 by Bitfinsider

As the final trading day of October began on Monday, stocks declined, but the major averages were poised to end a two-month losing streak.

The S&P 500 was down 0.2%, while the Nasdaq Composite was down 0.6% at the close of trading. The Dow Jones Industrial Average rose by 15 points, or 0.05 percent, on the market.

The markets made a significant rebound in October. The Dow led these gains and closed the month up 14.2%. The 30-stock index is on track for its best month since 1976 as investors wager on conventional companies, such as banks, to lead the next bull market. In October, the S&P 500 and Nasdaq Composite are up almost 8% and 4%, respectively.

“The market is taking a breather following last week’s strong run,” said Carson Group chief market strategist Ryan Detrick. Considering the importance of every Fed meeting and interest rate decision, a pause makes even more sense on Wednesday.

Despite a poor third-quarter results season marked by slowing growth and a few notable misses from large technology companies such as Meta Platforms and Amazon, October’s gains have occurred. Monday’s tech losses were driven by these companies as investors fled the growth sector.

This week, traders are ready for the newest Federal Reserve meeting, which begins on Tuesday. On Wednesday, the central bank is anticipated to increase interest rates by 75 basis points. Many on Wall Street are awaiting a signal from the Federal Open Market Committee’s statement or Chairman Jerome Powell’s press conference that the Fed may soon halt its rate hikes or lessen their magnitude.

Chris Senyek of Wolfe Research wrote in a note to clients on Monday that the upcoming rate hike on Wednesday and economic data forthcoming later in the week, such as Friday’s nonfarm payrolls report for October, could jeopardize the recent market advance.

“Wednesday’s statement will be essential for future market expectations,” said Quincy Krosby of LPL Financial. “During the question-and-answer portion of the news conference, Chairman Powell will need to balance his responses as if he were walking a financial tightrope.”

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