The Dow Opens November Trading 200 Points Higher as the Fed Meeting Begins

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Last Updated on November 1, 2022 by Bitfinsider

As a new month of trading began on Tuesday, stocks rose as Wall Street anticipated an important Federal Reserve rate announcement.

212 points, or 0.65%, were added to the Dow Jones Industrial Average. The S&P 500 gained 0.8% while the Nasdaq Composite gained 1.2%.

The gain in stocks coincided with a decline in interest rates preceding the central bank’s rate decision. Investors anticipate a signal that the Federal Reserve would relax its tightening stance in the coming months. The 10-year yield decreased 10 basis points to trade at 3.976%.

A better-than-anticipated earnings season continued on Tuesday with a strong report from Pfizer, while shares of Uber surged on a sales beat.

Some traders attributed Tuesday’s early gains to optimistic unverified suggestions that China may abandon its zero-Covid policy.

“While the consensus narrative has embraced the ‘Fed will slow its tightening pace’ narrative, China remains one of the most hated markets on the planet with its equity indices at multi-decade lows – there’s still a lot of room to rally on the upside in the coming quarters assuming a more realistic COVID approach is implemented,” Vital Knowledge’s Adam Crisafulli wrote.

Tuesday also marks the beginning of the Federal Reserve’s November meeting, which many anticipate will result in an interest rate increase of 75 basis points. Investors will also scrutinize the central bank’s announcement and Fed Chair Jerome Powell’s press conference for indications of a slowdown in the rate of monetary tightening.

Wall Street is coming off a month of significant gains. The Dow increased by about 14% in October, its largest monthly gain since January 1976, as investors shifted their focus away from technology and toward stalwarts such as banks. The S&P 500 and Nasdaq Composite each increased by almost 8% and 3.9%, respectively.

Tuesday’s economic announcements include statistics on job openings and construction spending for September. October ISM manufacturing data is also due.

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