After heading into correction territory amid more sell-offs last week, the S&P 500 recouped its losses Tuesday morning to settle for a 0.56% gain as of 11:00 a.m. ET.
The Dow Jones Industrial Average rallied over 150 points, while the Nasdaq Composite rose 0.50% as technology giants like Amazon and Google parent company Alphabet also gained in the early session of what’s been a volatile October for U.S. equities. Through last Friday’s trading session, the Dow was down 6.7%, while the S&P 500 and Nasdaq were down 8.8% and 10.9, respectively.
Amid third-quarter earnings reports, the Dow experienced four out of five losing sessions last week as technology stocks continued to sell off, signaling a sign that the decade-long bull run could finally be coming to a close. Yesterday, the Dow lost another 200 points to start the week after being up as much as 300 early on–analysts expect more of this market volatility to come.
“Obviously we’re in a correction phase of the stock market and I think investors have to realize that,” said Bruce Bittles, chief investment strategist at Baird. “The monetary environment has changed. As you can see, even with a 10 percent change in the stock markets, interest rates have barely moved lower.”
“Typically bull markets are global in scope and the question was would we follow the rest of the world of would they follow us? I think we’ve found the answer,” Bittles added.
Yesterday, Treasury yields rose and more threats of tariffs from the United States to China roiled the markets once again. Rising interest rates and trade wars have had investors fretting lately, but analysts aren’t quick to dismiss U.S. equities just yet.
“If we can get through the week without too many setbacks, then investors may begin to see the light at the end of the tunnel and sense opportunities in the markets, rather than view it with anxiety and fear which has certainly been the case in recent weeks,” said Craig Erlam, senior market analyst at OANDA.
This week, earnings reports for the third quarter will continue with Apple being one of the heavy hitters that could help spark a rally for stocks as 2018 comes to a close.
“Apple is scheduled to report quarterly earnings on Thursday and analysts who track the company predict— surprise —that the good times are likely to continue for Apple, the world’s most valuable public company,” said Jack Nicas of the New York Times. “Sales of iPhones have leveled off in recent quarters but people have been paying more for each device, sustaining a steady growth rate for the $1 trillion company.”
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